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February 27, 2006

Structured Settlement Advertising Wall of Shame 02-27-2006

Repeating in this week's Structured Settlement Advertising Wall of Shame is JG Wentworth. Their current online advertising epitomizes what is wrong with the current factoring company approach and it must be changed. While the Marketing Sherpa has highlighted how JG Wentworth turned around its earlier blah blah online results after it hired DMI partners, I question some of the strategies that have resulted in their high rankings. In previous entries I have highlighted the creative spin put on by DMI's Nina Mocciolino, for J.G. Wentworth which missed a few key details. Now we will cover its creative use of key words and why this should be troubling.

Suppose you are a conusmer faced with a proposal for a structured settlement annuity. You want to do some research. So you type "structured settlement annuity" into your browser. The following appears in AOL Search results for the key word "structured settlement annuity":

JG Wentworth is the leader in the structured settlement industry .....

*Structured Settlements are funded by annuities. These single premium annuities are purchased to provide a pre-determined payment stream to the payee. ...

"JG Wentworth is the leader in structured settlements"  appears on J.G. Wentworth's  website (note that the word "industry" has been omitted)

I've already covered my issues with J.G. Wentworth's (and Novation Capital's) used of the term "structured settlement industry"

An annuity is an insurance product that requires an insurance license to sell.  J.G. Wentworth in  its advertising states that structured settlements are funded by annuities. J.G. Wentworth not only claims that it is a leader in the structured settlement industry but it also claims that it is the leader in structured settlements. If J.G. Wentworth is the leader in structured settlements, and by its own admission structured settlements are funded by annuities, how come they don't show as being licensed by 3 state insurance departments**, including its home state of Pennsylvania? Verify for yourself by clicking the links below!

Pennsylvania Insurance Department  Agent Search

Connecticut Insurance Department  Agent Search

Texas Insurance Department  Agent Search

Factoring companies and cash flow companies engaging, or seeking to engage, in structured settlement transfers should be careful not to confuse the public by indirectly implying that they are licensed agents.  Advertisers and search engine optimizers need to also be aware that they could be getting their clients into trouble if they are not taking this into account. If you are a factoring company say what you are!

QUESTION FOR GOVERNMENT REGULATORS AND CONSUMER ADVOCATES:

You have required disclosures and rules for the behavior of insurance agents with respect to truth in advertising, requirements for licensing and other business practices designed to protect consumers.  Why is one industry so heavily regulated and one so unregulated? What are you doing to protect consumers from the practices such as those highlighted above and in this web log? Are you doing enough?

** I only surveyed these 3 insurance departments for the purpose of this article

Posted at 10:35 AM in Factoring Company Bad Business Practices, Settlement Advertising Wall of Shame, Structured Settlements |

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  • What Are Structured Settlement Annuities?
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  • History of Structured Settlements
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  • Firmwide Qualified Settlement Funds Debunked
    Firmwide qualified settlement funds have been heavily promoted to trial lawyers, but have been debunked in a detailed analysis in a July 2022 legal opinion a tax partner at the law firm of Faegre Drinker Biddle & Reath, LLP. Trial lawyers and firms who have established Firmwide QSFs or coinsidering establishing a Firmwide QSF should read the analysis as part of their evaluation.

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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
  • When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly
  • Be aware that financial advisors use of testimonials is prohibited or restricted
  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
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