SB 386 by Senator Ben Allen (D-Santa Monica) has been signed into law by the Governor. The California Association of County Veterans Service Officers sponsored this legislation.
Sacramento, CA – Today Governor Jerry Brown signed into law a measure authored by Senator Ben Allen (D – Santa Monica) to protect veterans from pension scams. The bill, Senate Bill (SB) 386, was proposed in response to the increasing number of veterans who are falling prey to investment schemes in which they are promised a lump-sum cash payment in exchange for their monthly retirement income.
“It is completely unacceptable that veterans are being taken advantage of through these financial scams. California’s 2 million veterans deserve better. This legislation is a modest, but important, reform that will help prevent our retired servicemen and women from being duped into similar schemes in the future,” Senator Allen said.
Nearly half of the 38 companies engaged in these phony investment deals are located in California. Once a veteran signs away his or her benefits, the company sells interests in the revenue stream generated by those future benefits to investors. This practice is illegal under federal and state law, but several companies continue to advertise the transactions in publications targeting veterans. SB 386 makes the act of advertising these pension poaching scams illegal, and allows prosecutors to file suit against the companies responsible for the advertisement.
Veterans are often led to believe they are agreeing only to a short-term loan to get them through a rough patch. In many cases, they have no other source of income than their pension when they return from active duty.
Senator Allen is a member of the Senate Veterans Affairs Committee. His 26th senate district is home to the Los Angeles Air Force Base and thousands of active and retired military members.