1. C'mon, how big is this problem and why should I care?
Think about how each of the fact below affects the perception of our industry and you each time you meet someone new and perhaps with your existing clients.
(1)Rhonda Bentzen of Bentzen Funding Solutions, known to many in the structured settlement industry, "honorary member" and membership chairman for the past 4 years of the Society of Settlement Planners, stated in December 2007 that 90% of her (structured settlement broker and settlement planner) clients take a referral fee (kick back) on structured settlement factoring deals. Worse, in September 2007 Bentzen told this author that the majority of it was undisclosed. This means there is a strong chance an informed attorney could believe that there is a 90% chance that you are on the "take", even if you aren't on the "take". Think about it!
(2)Woodbridge Investments, the folks that bring tiered "carnival prizes" to those who sell more and more of the payment (rights) that secure their financial futures, boasts that it has paid millions in commissions as part of its "structured settlement professionals program". Who has received these "millions" at the expense of tort victims?
(3)NEW (March 2008)! One of our sources told us that structured settlement brokers are the MOST GREEDY of all their referral sources, some building in fees of as much as 10%+ in deals where the factoring company was willing to work for much much less.
(4) Peachtree Settlement Funding's marketing company announced a direct mailer over Christimas 2007 to 21,000 potential customers for structured settlement factoring. Where did they obtain this list of names?
(5) NEW (November 2008)! certain industry members are purportedly selling names of structured settlement payees and have partnered with a "cash now pusher".
(6) NEW January 2009! NSSTA member name appears as the registrant of the website domain of cash now pusher Northeast Settlement Funding, his phone number appears as the number on the website before exposed in this blog. It is revealed that the NSSTA member sublet space in his office to the cash now pusher after a discussion about "ethical factoring companies". Who considers the use of "cash now" advertising to be ethical when there is plenty of support that cash now is not really cash now?
Do you want YOUR NAME to be associated with any of the above? Or do you want to willfully separate yourself from the practice of "structured settlement factoring vig", selling of names of structured settlement payees and distribution on confidential settlement documents to factoring companies? Join the rest of us on the Clean Vendor List list and make a statement. Or quit hiding in the tall grass and declare that you do. Doing nothing doesn't help your clients, your business or the perception of the industry.
2. Why Individuals and Not Companies?
Upon information and belief the problem is with individuals.Companies are however, encouraged to publish ethics statements which include a position on factoring on their websites.
3. Why "under penalty of perjury"?
There's nothing like inspiring faith if you've got some skin in jeopardy, if your statement is false. The Creative Capital CORA, the 4structures.com, LLC Structured Settlement Affidavit and similar pronouncements from other consultants, regarding general structured settlement practice, add an additional layer of comfort for lawyers, tort victims and judges. Consider that Bronx County New York requires a version of broker affidavit as standard court procedure. The very nature of the structured settlement factoring vig problem is very serious, where you may have lack of disclosure to tort victims of the existence of compensation and the ability to negotiate it. Once again, factoring broker Rhonda Bentzen of Bentzen Funding Solutions, has publically stated that an astounding 90% of its structured settlement industry referrals take fees (kick backs) from her. If you are not engaging in the practice what are you afraid of? Selling names of structured settlement payees is unethical but may violate confidentiality paragraphs in settlement agreements, thereby exposing attorneys who recommended the structured settlement consultant or settlement planner. What is the implication to co-brokers?
4. My name is not on the list because my company won't let me
This is a list for people who wish to willfully separate themselves from certain abhorrent business practices. Either you're in or not. Consider encouraging your company to make a public statement about business practices concerning factoring compensation on your company web site. Better know thy neighbor! If your company does not make a statement OR you did not declare by December 31, 2008 then YOU WILL BE PLACED on the NEW "had the opportunity to declare but did not take it list" which will be distributed to each and every state trial lawyer association in the country AND the American Association for Justice in a format suitable for distribution to their members beginning in late January 2009.
5. This is not fair
It's your choice! You are free to participate or not as you see fit. What isn't fair is a tort victim being referred to the same source as those on the list and getting less money at a time of desperate need (e.g. to pay off a credit card, pay for an operation, to get out of bankruptcy) because of the undisclosed and unnegotiated structured settlement factoring kick backs. Do you charge or accept vig from a referral to a plumber for a neighbor or friend in need, from a good restaurant for referring someone who is hungry, from a movie theatre where you saw a good movie and referred someone pondering what to do tonight, or from a CPA who you referred to sort out a tort victim's estate? What is also not fair is the rest of the industry being tainted by the actions of certain myopic profiteering individuals
The information being provided IS in the public interest.
6. When will the list be published?
The Structured Settlement Clean Vendor List was first published during the week of December 14, 2007. Individuals are added thereafter upon receipt of their original declarations. This is an ongoing grass roots project. The list now includes 5% of the producers in the structured settlement industry. The "had the opportunity but did not take it" list will be published in January 2009.
Those who fall on the latter list will have the opportunity to remove themselves from the list by sending in a completed, executed and notarized declaration OR by coming out of the "tall grass" and declaring their position on their factoring activity.
7. Who will see the names on the list?
The Structured Settlement Clean Vendor List and the "Had The Opportunity to Structured Settlement Business Practices Declaration but did not take it" list are both published on Structured Settlements 4Real. Structured Settlements 4Real has been averaging in the area of 7,000 page views monthly. This author intends to notify the nation's trial lawyers of this resource which has been designed for the public benefit of tort victims, lawyers, judges and other interested parties. Those on the list and members of the news media may wish to do the same.Some have already volunteered to assist with disseminating this information to their state TLA.
8. Is this sponsored by the NSSTA or SSP?
This is not sponsored by any trade association. It is a grass roots effort. However ALL members of NSSTA, SSP AND any non member full time structured settlement/settlement planning practitioners are eligible to participate.
9. Why are there no other representations in the declaration?
Because the scope of this declaration is very specific to compensation for structured settlement factoring transactions and handling of confidential information and documents by intermediaries. This declaration is not intended to apply to life settlements (which are not structured settlements).
10. I did participate in one of these deals a few years ago but no longer do. Am I still eligible?
The Structured Settlement Business Practices Declaration Concerning Factoring Compensation is clear. The "as of" date is intended allow the project to be inclusive of (1) those who have never taken a referral fee, (2) those who have at a point in time taken a fee and came to a moment of clarity that caused them to stop the practice and (3) perhaps most importantly, to give the opportunity to those who are taking fees to stop.
Download StructuredSettlementDeclarationonFactoringPractice.pdf
11. What if I think it's OK to receive structured settlement factoring kick backs or sell names to factoring companies?
Then obviously don't sign the declaration. Consider posting something about your business practice on your website so that you can be evaluated "on the merits". Do not continue to hide. In fact you will no longer be able to hide.
12. What happens if I get a call from someone who wants to sell their payment rights after I've signed the declaration?
The declaration is about 3 things. Identifying, for tort victims, lawyers and interested parties, those structured settlement brokers and settlement planners who (1) take no factoring compensation (2) Do not sell lists of names or files to factoring companies (3) Do not supply settlement documents to factoring companies. If you choose you can still handle the call and provide pro bono service. You are declaring only what is in the declaration and by declaring "under penalty of perjury" you have willfully created a meaningful disincentive to profiteer at the expense of the tort victim.
Inclusion on the Structured Settlement Clean Vendor List is not intended to prevent settlement consultants from speaking to tort victims about their options.
13. How many people do you expect to get on this list?
We've already got a "minyan". It only gets better from here. Remember that this project is an ongoing voluntary process.
14. I'm still not convinced
Have a look at the the Florida Stuctured Settlement Factoring Disclosure. Download chambers_fla_disclosure.pdf . That should be all that anyone needs to know that the "structured settlement factoring kick backs ARE coming out of the tort victim's money.
Have you had any attorney express concerns about structured settlements due to the perception that the structured settlement may be factored? What meaningful action have you taken to demonstrate that you are not adding to the problem?
15. What if Don't Agree with Everything On The Declaration
If you cross off a disagreeable item on the Declaration and send it in, notarized, your name and declaration will be published. You must realize however that readers will be free to draw whatever inference they choose from your changes. For example, if you agree with points #2 and #3 and cross out the no kick back point on the declaration simply put 2 and 2 together!
16. Who The F%^&ing Hell Are You?
Someone who gives a damn. Someone who is tired of ineffective "slow as molasses" industry leadership who would rather sweep this issue under the rug. Do you give a damn? Then show it.
17. I want to make a declaration. Where can I find it?
Simply click the download link right below, sign it, get it notarized and send it in!
Download StructuredSettlementDeclarationonFactoringPractice.pdf
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