State regulators have reached a settlement of a case stemming from allegations that a company made unlicensed pension advances to Washington consumers.

The Washington Department of Financial Institutions (DFI) announced that Future Income Payments LLC, formerly known as Pensions, Annuities and Settlements LLC, has agreed to stop unlicensed activity with consumers and will also make a $25,000 contribution to the department’s Financial Literacy Fund.

“This company targeted some of our most vulnerable citizens, including elderly and disabled pensioners,” said Gloria Papiez, acting director of DFI. “The resolution reached in this case will help protect those pensioners and future Washington pensioners from this type of predatory lending.”

According to the department’s Consumer Services Division, FIP marketed pension advances through its websites as a way for consumers to get cash quickly. Consumers signed agreements with FIP to get a one-time lump sum in exchange for monthly payments for three to 10 years to FIP from the consumer’s bank account, into which their pension had been deposited. The company characterized the transaction as the purchase of an income stream. However, state regulators concluded that such transactions were loans subject to the Consumer Loan Act.

The result of such transactions was that many consumers would eventually pay excessively more than was received. For example, one Washington consumer borrowed $3,700 from FIP and was required to pay the company a total of $18,600 in monthly payments over a period of 60 months. Another consumer borrowed $4,400 and was expected to pay over $46,500 over a 120-month period.

In all, FIP loaned a total of $948,000 to at least 83 Washington consumers with projected earnings in excess of $2,813,000 based upon the anticipated receipt of the consumers’ monthly payments, according to Charles Clark, director of the Consumer Services Division.