I have yet to find a plaintiff lawyer who has a warm and fuzzy feeling about a structured settlement factoring (transfer) companies such as JG Wentworth, Peachtree Settlement Funding, Novation Capital, Settlement Capital, Stone Street Capital, RAM Funding, Prosperity Partners, Inc. (PPICash), Clearscape Funding, FDR Resources and all of their alter egos. I have spoken to some of the best and brightest lawyers and there were no takers. Glad I am only conducting a survey for the purpose of this web log and my readers hopefully for the betterment of my readers and consumers. Today it was 3 against and 0 for structured settlement factoring (for compensation) performed by the structured settlement broker or settlement planner who set up the structured settlement. The predominant reaction was total recoil at the concept that a structured settlement broker or structured settlement planner who set up a structured settlement for one of their clients would make further compensation on that same client for encouraging the sale of the structured settlement payment rights. The words "double dipping" have been mentioned more than once by lawyers in relation to this question.
Which leads me to my next proposition which is that the Board of Directors of the National Structured Settlement Trade Association ("NSSTA") must do something soon about Symetra, an annuity issuing company, which has been marketing its own factoring company,Clearscape Funding Corporation, to NSSTA members. A memo to all structured settlement brokers in the NSSTA was sent by Kim McSheridan, VP Income Annuities at Symetra (along with marketing material) which was eventually posted on the Internet by Patrick Hindert of S2KM on his blog. I've already covered my observations on that decision by Symetra on January 14, 2006. However I must add that Ms. McSheridan's action is especially surprising given that she sat in on two meetings of the NSSTA Long Range Planning Committee when we discussed the Internet marketing confusion created by a factoring companies and she said nothing about Symetra's ambitions.
In keeping true to its roots NSSTA previously booted out two members who ceased to be structured settlement brokers and went into factoring (incidentally the only two in the factoring industry who earned the designation of Certified Structured Settlement Consultant, Rhonda Bentzen of Strategic Capital and James Lokey of Settlement Capital). Now the NSSTA must show its mettle and boot Symetra out of the NSSTA for the same reasons.
While trying to be fair to Symetra in that one could argue that there are two separate businesses. However, the problem is that an officer of Symetra has unfortunately crossed the line and already solicited NSSTA members for the factoring company through distribution of promotion materials so where is that separation?. Allstate has not done that. As I understand, it provides a service only to its annuitants. Another low key on factoring major company that will commute under a IRC 5891 "qualified order" hasn't done that either. Symetra has done a major no-no since it was abundantly clear in the memo that Symetra (through Clearscape) is striking out beyond providing a service to its own annuitants. If Symetra isn't booted then do Lokey and Bentzen justify readmittance to NSSTA? Bentzen is well liked by many in the structured settlement industry beacuse of her soft sell style. She is true to her roots as a former structured settlement broker, and neither she nor her company appear to be out hustling people to "live their dreams" by selling their structured settlement payment rights. On the other hand Symetra's company Clearscape Funding still has the smiling dreadlocked "dude your getting a lump sum dude" on its website and mentions the enticing word "dreams" 3 times on one of its web pages.
Bentzen is the membership chairman of the Society of Settlement Planners. Having had many conversations with her on this topic she neither feels that "factoring is settlement planning" nor that factoring companies belong in the Society of Settlement Planners (or NSSTA for that matter). Apparently she even offered to resign numerous times from the SSP but has met considerable resistance. Here's a bright well respected lady who services structured settlement factoring transactions and she gets it.
The NSSTA Board must act on Symetra , and act quickly, to send a clear message to its members, the structured settlement industry and consumers. It should avoid falling into the trap that the Society of Settlement Planners has fallen into on this issue that I predict will soon be the cause of that organization's demise. If NSSTA doesn't act... won't it look hypocritical with respect to actions taken against Lokey and Bentzen? Worse yet would it then be lending creedence to Novation Capital and JG Wentworth whose bold statements suggest that they are a leader or the leader in the structured settlement industry? You have the power to define, NSSTA, use it!
I have also heard some buzz concerning a proposition that annuity issuers form alliances with factoring companies to outsource their factoring business. Has anyone else heard this?
And if there is a trial lawyer out there who is warm and fuzzy that a structured settlement broker or structured settlement planner who set up a structured settlement for one of their clients would make further compensation on that same client, for encouraging the sale of the stuctured settlement payment rights, let us hear from you on this blog.
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