The Office of Personnel Management recently issued an alert about a scam targeting federal retirees’ annuities.
According to OPM, one company in particular (which the agency did not identify) is targeting federal retirees with a scam that offers a cash payment in exchange for a portion, or all of a retiree’s future annuity payments, generally much less than their long-term worth, and typically charging high interest rates and fees.
OPM said that it has received numerous calls recently from this one company that ask the agency to verify annuity amounts and banking information such as routing and account numbers.
OPM said its Inspector General’s office confirmed the company is currently under investigation by the Consumer Financial Protection Bureau.
OPM issued a similar warning to federal retirees earlier this year about a scam in which imposters would threaten to cut off a retiree’s annuity payments unless he or she issues an immediate payment.
Tips to Stay Safe
The CFPB offers these three tips to avoid scams such as this one:
Avoid loans with high fees and interest
Pension advance companies may not always advertise their fees and interest rates, but you will certainly feel them in your bottom line. Before you sign anything, learn what you are getting and how much you are giving up.
Don’t sign over control of your benefits
Companies sometimes arrange for monthly payments to be automatically deposited in a newly created bank account so the company can withdraw payments, fees and interest charges from the account. This leaves you with little control.
Don’t buy life insurance that you don’t want or need
Pension advance companies sometimes require consumers to sign up for life insurance with the company as the consumer’s beneficiary. If you sign up for life insurance with the pension advance company as your beneficiary, you could end up footing the bill, whether you know it or not.
Report Suspicious Activity
Suspected scams should be reported to OPM’s Office of Inspector General (OIG) via the hotline number at 877-499-7295 or via the online compliant form. The IG office can also be contacted by mail at:
OPM Office of the Inspector General
1900 E Street NW Room #6400
Washington, DC 20415-1100