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VA WARNS VETERANS ABOUT SCAM TO PURCHASE BENEFITS
BSI Registered
NIFE
Washington, D.C. - Acting Secretary of Veterans Affairs (VA) Hershel W. Gober
warned veterans about a financial scam that offers lump-sum payments in
exchange for monthly VA disability checks or pensions.
"These schemes seem to target the most
desperateof our veterans," said Gober.
"No financial expert on this planet would
encourage anyone to accept30 cents
today if they could get a dollar tomorrow.
Doing this to veterans is reprehensible."

Federal law outlaws the direct sale of VA benefits.  VA is also prohibited from
paying pensions and disability compensation to anyone other than a veteran,
a family member or a lawful guardian.

The latest schemes, however, attempt to avoid the long-standing federal pro-
hibition by representing these transactions as loans.  Companies persuade
veterans to give up their disability and pension checks for a specific period -
up to eight years - in exchange for a lump-sum cash payment typically worth
30 - 40 percent over that same period.  In some cases, the veteran must also
take out a life insurance policy naming the company as beneficiary.

In the case of a veteran with a disability rated at 50 percent, it could mean
receiving a one-time payment of about $20,000, then forfeiting a $609 monthly
payment that in the course of eight years would bring in nearly $60,000.
"VA lawyers are still studying the fine
print in these schemes to determine
whether or not they are legal,"
Gober said.  "Even if they're legal,
they're despicable, because they
take money away from people in
the direst financial straits."

VA pensions go to wartime veterans
incapable of self-support for reasons
unrelated to their military service.  
VA disability compensation is paid
to veterans with lingering health
problems related to their time in
uniform.

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