Government regulators have sued two related companies alleging they deceived customers, including an unknown number of military retirees, about the costs and risks of pension advance loans.

The Consumer Financial Protection Bureau and the acting superintendent of financial services of the state of New York filed suit in federal court in California on Thursday against Pension Funding LLC of Huntington Beach, California, and Pension Income LLC, formerly of Huntington Beach but recently relocated to Lafayette, California.

The companies, with managers connected to both entities, did business nationwide, including New York.

From 2011 until about last December, the companies offered customers "pension advances" — lump-sum payments that pensioners could receive in return for agreeing to redirect all or part of their pension payments, over eight years, to repay the funds, according to the lawsuit, filed in the U.S. District Court for the Central District of California.

Although the companies led pensioners to believe they were selling their future pension income, the advances actually were loans, regulators contend — and on average, the effective annual interest rate was a whopping 28.56 percent.

"These companies duped consumers into taking out pension advance loans by deceiving them about the terms of the deal," said CFPB Director Richard Cordray, in an announcement of the lawsuit. "We are working to put a stop to the illegal practices these companies are using to sell their bogus product to military veterans and other pensioners."

Information was not immediately available about how many military retirees may have been harmed by these transactions. However, in marketing information to investors found online by Military Times, the companies state that those who sell their pensions to the companies are typically military.

Regulators have requested, among other things, that the defendants be ordered to pay consumers who were harmed.

Initial attempts to reach officials from the companies were unsuccessful. [One number was no longer in service; one simply wasn't working; left a message on another number.]

In marketing slides available online, Pension Income LLC states that it offers customers "the ability to receive their pension funds sooner and to take control of their financial planning. ... To combat pension funds from eroding, taking a lump sum payment from one's pension plan is an option. This provides a person with the convenience of managing their funds from the start. In addition, a service that purchases pension plans is also an alternative that offers quicker access to pension funds, which reduces the long-term effects of inflation."

But the fees associated with the loans are costly for pensioners, according to regulators.

In one case cited in a separate action taken in 2014 by Washington state officials, a consumer in Washington entered into an agreement with Pension Funding and Pension Income in 2012 for a lump sum payment of $36,596.09. The monthly repayments of $875.46 over eight years totaled about $84,044.16, according to a statement of charges from the Washington Department of Financial Institutions' Division of Consumer Services.

The California lawsuit alleges that the companies charged a variety of fees to pensioners, including a 9 percent commission for the agent who recruited the investor; a 3 percent commission for the broker who recruited the consumer; a 5 percent to 9 percent fee for pension funding; an 8 percent fee for a reserve fund to protect against consumers who failed to make payments; and a 2.84 percent fee for a death reserve fund to insure the life of the pensioner, so that the investors would receive payments if the consumer dies.

"The defendants used blatantly deceptive practices to harvest the hard-earned pensions of seniors and military personnel," said Anthony J. Albanese, acting New York superintendent of financial services. "This scheme involved false advertising, illegal loans at high interest rates and other abusive tactics that our department simply will not tolerate."

These loans, from various companies, have been an issue for years for military retirees. In 2006, Military Times reported on a Florida judge's ruling that a retired Marine would not have to pay back an extra $93,000 over five years on an initial $38,000 loan.

The retiree already had paid nearly $51,000 to a Florida company. The judge's ruling was based on the fact that the "assignment" of the retiree's military benefits was not a sale of the pension, as the company contended.

Consumer advocates have long said that these contracts are loans, although the companies that market them say they are sales or payouts for pension checks.