by John Darer CLU ChFC MSSC CeFT RSP CLTC
It has come to my attention that certain settlement planners entrusted with the stewardship of protected information about injury victims with structured settlements, have sold that information to structured settlement factoring companies for financial gain. So that it is perfectly clear, I'm not speaking of a single referral for someone with a genuine need. I'm referring to settlement planners trafficking hundreds or even thousands of names of annuitants, details of their annuities, annuity issuer, payment streams and contact information in exchange for hundreds of thousands or even millions of dollars. Information that these folks did not have the authority to sell and may even have lied in the placement of the structured settlement by saying that the information was confidential. They may have also misrepresented to the buyer of the protected information, that the settlement planner had the authority to sell the protected information from each and every one of the parties to the deals.
The motivation for the people who sell protected data to structured settlement factoring companies and investors can be nothing more than pure greed, perhaps desperation, with reckless disregard for how the data will be used, possibly resold and used again, as well as and obligations they may have under the law. Those going down this rotten path abrogate the trust in them by clients and their lawyers and placing them like fish to shoot within a barrel despite that it being known that:
- Today structured settlement factoring has devolved from justification as a source of liquidity to one of endless documented cases of systemic destruction of a stable source of income for annuitants, with the aid of shady lawyers and certain inattentive judges not up to the task.
- There is no regulation of sales practices or licensing (with the exception of Maryland and Louisiana) despite the endless documented cases of systemic destruction of a stable source of income.
- Factoring companies are collectively going for every last penny.
- The structured settlement factoring industry has included denizens who are convicted felons, tax dodgers, Ponzi schemers, forgers, none of whom would be permitted to operate in the primary market.
- There is no accountability for bad behavior. Scams and false advertising abound as representatives with no credentials, groom and participate in financial rape over and over again.
- Hedge funds, private equity and others backing bad actors have endless amounts of money to fight victims of fraud, including victimizing those with extreme mental retardation.
- There is endless documentation of fraud on the Courts, induced by structured settlement factoring companies.
- There have been more than two hundred instances of forgery of Court documents related to structured settlement transfers in the last 6 years that have been made public.
- There are notary publics who take bribes from structured settlement factoring companies to help them find deals.
In my opinion it may be time to blow the whistle on these "ethical skunks", who gained the trust of their clients and likely made millions in placing the structured settlements in the first instance and now a mere disgrace to the structured settlement and settlement planning industry. They deserve to be outed and punished for disseminating protected information for profit.
At the time of posting, my company, 4structures.com LLC is the one of the only companies in the structured settlement industry that has published a transparent written policy on structured settlement factoring. Why is that?
Every affidavit that I sign in conjunction with the placement of a structured settlement bears the following:
"Neither I, nor my firm, will: (a) provide any information about this settlement to any factoring company for any purpose; b) solicit the plaintiffs or plaintiffs’ family on behalf of any factoring company for any purpose, including, but not limited to, the proposed sale of plaintiff’s future periodic payment rights, nor will I or my company participate, assist, promote, or aid in such solicitation by any person, firm, corporation or entity; or (c) seek or accept any consideration financial or otherwise, directly or indirectly from a factoring company, with respect to the proposed structured settlement."