OTTAWA, ON, December 18, 2000 - An attempt by a U.S. firm to have war disabled veterans assign their pensions to a U.S. firm titled Trans World and receive a cash settlement is illegal in accordance with the Veterans Pension Act, according to Cliff Chadderton, Chairman of the 37-member National Council of Veteran Associations.

Section 30 of the Act states:

"No pension or allowance shall be assigned, charged, attached, anticipated, commuted or given as security, and the Minister may refuse to recognize any power of attorney granted by a pensioner with reference to the payment of a pension or an allowance."

"This provision has been in the Pension Act for many years," Chadderton stated. "Its purpose was to ensure that veterans did not 'cash-in' their pensions, leaving them destitute. The legislation dates back to the 1930's when many Canadian veterans were being victimized by what researchers have termed 'loan sharks,'" he stated.

The U.S. firm - which operates out of Baltimore, Maryland, has been carrying on an active campaign directed at Canadian veterans with the slogan "We pay cash, now!" The U.S. company has posted Internet advertisements in Canada offering veterans "a top dollar sum for cash for your military retirement pension." The firm - - Trans World Funding - - states that it will buy pensions for eight years and then return them. Veterans signing on get a one time payment to open a joint bank account with the company which withdraws the pension money as it arrives from the government.

Chadderton stated that, according to his investigations, the company pays only 30 to 40 cents on the dollar. Moreover veterans must take out a life insurance policy naming the company as its benefactor.

Janice Summerby, a spokesperson for Veterans Affairs Canada, told Stewart Bell, a reporter for The National Post, in an interview last Friday that the arrangement was legal "as far as we know."

Chadderton has now asked the Minister to place advertisements in the Canadian media to head off any action which a Canadian veteran might take and which might involve him in a legal proceeding from which he might have difficulty in extricating himself.

Text of Cliff Chadderton's letter to the Deputy Minister of Veterans Affairs of December 18, 2000, follows:

Mr. Larry Murray Deputy Minister, Veterans Affairs Canada

SUBJECT: ASSIGNMENT OF WAR DISABILITY PENSIONS TO TRANS WORLD OF BALTIMORE, MARYLAND, U.S.A.

Dear Mr. Murray:

This has reference to the news reports concerning an attempt by Trans World of Maryland, U.S.A., to have veterans assign their pensions and receive immediate cash benefits.

I was interviewed on this story by Stewart Bell of The National Post last Friday.

The story has been published in many daily newspapers across Canada.

Sent herewith is copy of a news release which we are issuing today.

You will note that we are relying on Section 30 (1) of the Pension Act.

I believe this "no assignment" provision was in the Pension Act for many years.

Its effectiveness, however, was in prominent evidence during the 1930's.

Many veterans, some strapped for cash, assigned their pensions to hotels and other non-financial organizations with the result that many of them were unable to support their families.

It will be noted that under Section 30 (1) the Minister may refuse to recognize any so-called "power of attorney" involved in a scheme of this nature.

National Council is hereby proposing that Veterans Affairs use the media to insert paid advertising to put a stop to this procedure.

My research indicates that many veterans became tied up in intricate legal arrangements going back to the days before World War II. In my view the best procedure would be for the Government to issue a warning that such arrangements may be illegal.