by John Darer
The woman who called me today is a role model for those who have no alternative but to go down the road of selling structured settlement payments rights.
Her initial offer was from one of the "low hanging fruit grabbers" with a lofty 15.5% plus discount rate. Simply by being patient and shopping around the woman was able to receive two offers with less than a 7% discount rate. Simply outstanding.
This result is on the back of a recent report about another annuitant who also consulted with us, pro-bono, who we encouraged to shop around, who did shop around, and was able to negotiate a 6.28% discount rate from a Texas based structured settlement purchaser.
A common thread between the two cases is the how both annuitants' shopping efforts make mincemeat of a claim by a bank which claims "other companies are simply brokers who wedge themselves between structured settlement annuitants (such as you) and the financial institutions (such as us) that actually purchase the payments. ... Bank cuts out the middleman — so you get more money, and you get it faster! Why pay a broker when you can go direct?". That entity's offer in the other claimant's case turned out to be the worst of all offers according to the annuitant. In the woman's case it embodied a discount rate of close to 14% and was one of the worst. The difference could be big bucks.
"In Business As in Life, You Don't Get What You Deserve, You Get What You Negotiate"-- Chester L. Karrass
"Unfortunately, single quote transfers remain a common practice within the structured settlement secondary market resulting in unnecessarily high discount rates"-blogger and Structured Settlements and Periodic Payment Judgments text book co-author Patrick J. Hindert.