It never ceases to amaze me every time I see yet another predatory financial product making the rounds.

Financially strapped seniors are increasingly being targeted by firms offering high-priced loans against their pensions, according to a report in the New York Times.

In one case, a borrower took out a loan against his pension for $10,000 for 60 months. His monthly payment was $353. The total cost of the loan was $21,180, or an interest rate of 36.4 percent, according to the Times.

“In lean economic times, people with public pensions — military veterans, teachers, firefighters, police officers and others — are being courted particularly aggressively by pension-advance companies, which operate largely outside of state and federal banking regulations, but are now drawing scrutiny from Congress and the Consumer Financial Protection Bureau,” writes reporter Jessica Silver-Greenberg.

The Times looked at more than two dozen pension advance contracts and found that, after factoring in various fees, the effective interest rates ranged from 27 percent to 106 percent. And here’s the real ugly side of these loans: The information about the rates isn’t disclosed in the ads or in the contracts. Additionally, to qualify for one of the loans, borrowers are sometimes required to take out a life insurance policy that names the lender as the sole beneficiary.

Stan Hinden, author of ‘How to Retire Happy: The 12 Most Important Decisions You Must Make before you retire.’ (Jeffrey MacMillan/The Washington Post)

The pitches for pension loans are luring retirees with scant savings and poor credit, which makes it difficult for them to get traditional loans. Data from the Federal Reserve found that the combined debt of Americans ages 65 to 74 is rising faster than that of any other age group.

Live Chat With Stan Hinden

Speaking of seniors, if you’re close to retirement or already in retirement, join me today at noon ET for a live online discussion.

My guest will be Stan Hinden, author of “How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire.” Hinden’s book was the April pick for the Color of Money Book Club.

If you can’t join live, send your questions in early.

The Tipping Point

Many restaurant diners leave a standard tip of 15 percent to 20 percent regardless of the service they receive, according to Tom Frank, a restaurant consultant and one of the founders of P.F. Chang’s China Bistro restaurant chain.

But if you get bad service, you shouldn’t feel obligated to leave a tip, Frank tells Kiplinger Magazine.

In looking at tipping habits, Frank found that nearly 40 percent of survey participants said they felt obligated to leave a tip despite the bad service.

Stop feeling sorry for servers and use your tips to reward good service, Frank says. “There is nothing else you would pay for if you didn’t get it,” he says in the article. “Yet people pay -- by leaving a tip -- for service they don’t get.”

Because tips are built into the pay structure for servers, I understand why people to still tip when they don’t get good service. And often the service can be dictated by other factors – slow kitchen, crowded restaurant, etc.

If you can’t walk away without leaving something even if the service was poor then leave less than what’s customary but also tell a manager about your experience, Frank says.

The Color of Money Question of the Week

How do you react to poor service at a restaurant? Send your responses to Include your full name, city and state. Put “Tipping Point” in the subject line.

Loose Lips Sink Eel Squealers

Last week’s Color of Money Question was a two-parter.

The first question related to a report that more than 30 employees from a New Zealand hospital were reprimanded or fired after sneaking a look at an X-ray of a patient who had an eel stuck in his buttocks. The images were later e-mailed and leaked to the media.

I asked: “Should the hospital have fired employees for not being able to resist telling the world about a definitely titillating story?”

“The hospital acted correctly,” said Brent Hulsebus of Des Moines. “Patient privacy needs to be defended vigorously. Regardless of how ‘newsworthy’ an individual patient’s story might be, [patients] and their physician must always be able to trust that their records are confidential.”

I also asked you to weigh in on the firing of A.J. Clemente. On his first day working as a weekend anchor at NBC affiliate KFYR in Bismarck, N.D., Clemente was fired after cursing on air. Clemente said he didn’t know that the microphone was on. Since the firing, Clemente has been on a media blitz, appearing on “The Tonight Show With Jay Leno” and the “Today” show.

I asked: “Should the station have fired Clemente?”

Evelyn Christianson of Altoona, Iowa, said that even though Clemente was new to the position at the station, he couldn’t have been completely new to broadcasting.

She wrote: “He has no excuse for his bad judgment of ever, ever, EVER using objectionable language anywhere near where he or that location might be recorded or broadcast. It’s too risky. And only a fool risks being lazy, being careless, when a much-desired job is on the line.”

Courting With Coupons

A survey by Coupon Cabin found that 26 percent of adults have used a coupon on a first date.

“Would you walk out on a date if the guy or woman used a coupon?”

Here are some reader responses:

“Using coupons on a date, and acceptance thereof, depends on your stage in life and dating,” said Tiffany Davis of Hollywood, Fla. “When I was in college (in D.C.), most of us didn’t have much money and we lived for coupons to restaurants. It was WHERE your date took you that mattered. A coupon date to Benihana or TGI Friday’s was fine [but] to McDonalds, not so much. As an adult, though I would look sideways at coupons on a first date. I wouldn’t walk out, but I’d be hesitant about a second date.”

Another reader had a different point of view: “Walk out on her for bringing a coupon? Quite the contrary, I would be impressed and enamored!” wrote Steve of Aventura, Fla.

Michelle’s Mailbag

I have a new Monday online feature that allows me to answer the questions I couldn’t get to during the live chat and to respond to questions you send by e-mail (, Twitter (@SingletaryM) or Facebook (

Earlier this week, I responded to a couple of questions from last week’s online discussion.

One reader asked if she and her husband should loan his mother $13,000. The daughter-in-law wanted to know: “What should we keep in mind as we discuss this? Do we need to set up a payment plan with her?

Read my response here.

You are welcome to e-mail comments and questions to Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.

Follow me on Twitter at @SingletaryM, or connect with me on Facebook at

Tia Lewis contributed to this report.