October 9, 2004
In a federal lawsuit filed in Atlanta, three military veterans accuse two financial companies of swindling veterans out of their pensions and benefits in advance-funding scams.
The lawsuit seeks class-action status and a court order against Advanced Funding Inc. of Glen Burnie, Md., and C&A Financial Programs Inc. of Stuart, Fla. The companies advertise in national military publications and try to give the impression they are endorsed by the armed forces, the lawsuit charged.
"The targeting and victimization of men and women in uniform is one of the most reprehensible acts anyone could commit," said former Georgia Gov. Roy Barnes said, one of the lawyers representing the veterans.
"During a time when we should support our troops, those who would single veterans out, charge them 40 percent to 50 percent interest and deprive them of their military pensions should be dealt with to the fullest extent of the law," Barnes told the Atlanta Journal-Constitution.
The suit alleges that the companies are running a "deceptive scheme" by charging high-interest loans to retired and disabled veterans without providing the cost-of-credit information required by the federal Truth in Lending Act.
The lead plaintiff in the suit is Michael Amos, a Marine Corps sergeant who retired after 20 years of service in 1992. His monthly retirement pay was $1,492.
In 2001, Amos said he saw an Advanced Funding ad in the Navy Times promoting "cash advances" for veterans. He contacted the company and signed an agreement to receive $42,500 in exchange for eight years of his military pension, the lawsuit said. After $4,379 in fees and life insurance were deducted, Amos received $38,120.
Over the term of the loan, Amos would have to repay $143,284, including $105,164 in finance charges. The annual percentage rate of the loan was 45 percent, the lawsuit said.
The suit charges that, while the companies claim they are purchasing a veteran's benefits and pension, the companies are doing no more than providing loans with usurious interest rates.
