alternative financial services

The Oligarch Recovery – U.S. Military Veterans are Selling Their Pensions in Order to Pay the Bills

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Moore soon found himself two months behind on rent and at least 10 days from payday. In bed that night, he saw a TV ad for Future Income Payments, a company based in Irvine, Calif., that buys pensions in exchange for a lump sum. The company said it had worked with military personnel and government workers. Ten minutes later, he got up and made the call.

The next day, a company representative called Moore back and explained that he would receive a $5,000 cash advance for selling part of his pension. In exchange, Moore would have to pay the company $510 a month for five years  — a total of $30,600.

If it were a typical loan, that would amount to $25,600 in interest — a rate of 512 percent.

Most of the companies advertise nationally on news sites and in military magazines, consumer advocates say. One ad highlighted in the recent congressional hearing on pension advances featured two smiling people in uniform below the words “This is our America.”

The effective interest rates charged by pension advance companies can be abusive, Cartwright said. But it is particularly “egregious” that the companies go after military retirees, targeting income streams that are backed by the federal government, he added.

– From the Washington Post article: Some Retirees are Making a Terrible Mistake with their Pensions 

Welcome to the oligarch recovery. An economic rebound so robust that an ever increasing number of Americans are being forced to borrow money at usurious rates just to pay the bills. Today, I want to introduce you to the latest scheme to profit from poverty: Pension Advance Companies.

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The Oligarch Recovery – 30 Million Americans Have Tapped Retirement Savings Early in Last 12 Months

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The ongoing oligarch theft labeled an “economic recovery” by pundits, politicians and mainstream media alike, is one of the largest frauds I’ve witnessed in my life. The reality of the situation is finally starting to hit home, and the proof is now undeniable.

Earlier this year, I published a powerful post titled, Use of Alternative Financial Services, Such as Payday Loans, Continues to Increase Despite the “Recovery,” which highlighted how a growing number of Americans have been taking out unconventional loans, not simply to overcome an emergency, but for everyday expenses. Here’s an excerpt:

Families’ savings not where they should be: That’s one part of the problem. But Mills sees something else in the recovery that’s more disturbing. The number of households tapping alternative financial services are on the rise, meaning that Americans are turning to non-bank lenders for credit: payday loans, refund-anticipation loans, pawnshops, and rent-to-own services.

According to the Urban Institute report, the number of households that used alternative credit products increased 7 percent between 2011 and 2013. And the kind of household seeking alternative financing is changing, too.

It’s not the case that every one of these middle- and upper-class households turned to pawnshops and payday lenders because they got whomped by an unexpected bill from a mechanic or a dentist. “People who are in these [non-bank] situations are not using these forms of credit to simply overcome an emergency, but are using them for basic living experiences,” Mills says.

Of course, it’s not just “alternative financial services.” Increasingly desperate American citizens are also tapping whatever retirement savings they may have, including taking the 10% tax penalty for the privilege of doing so. In fact, 30 million Americans have done just that in the past year alone, in the midst of what is supposed to be a “recovery.”

From Time:

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Use of Alternative Financial Services, Such as Payday Loans, Continues to Increase Despite the “Recovery”

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Families’ savings not where they should be: That’s one part of the problem. But Mills sees something else in the recovery that’s more disturbing. The number of households tapping alternative financial services are on the rise, meaning that Americans are turning to non-bank lenders for credit: payday loans, refund-anticipation loans, pawnshops, and rent-to-own services.

According to the Urban Institute report, the number of households that used alternative credit products increased 7 percent between 2011 and 2013. And the kind of household seeking alternative financing is changing, too.

– From the Citylab article: Half of All American Families Are Staring at Financial Catastrophe

It’s an economic recovery so lopsided, corrupt and fraudulent only an oligarch could love it.

One of the key themes at Liberty Blitzkrieg since inception has been to point out that the current economic recovery is largely a sham. While there are certainly meaningful innovations happening in the less regulated and corrupt parts of the economy, such as the technology sector, much of the landscape is riddled with waste, fraud, cronyism and stagnation. So much so, that I have gone ahead and characterized the entire post crisis economic environment to be the “oligarch recovery.”

Nowhere is this more evident than within the many statistics demonstrating that things for the growing American underclass are getting worse, not better. An article published last week by Citylab makes the point. It notes:

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