Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

123 Lump Dumb Still Showing "Undercover Brother" and His BIG Card Board Check

Apparently trying to appeal, er... take advantage,  of the least sophisticated element of our society, 123 Lump Sum (dubbed here "123 Lump Dumb") still promotes itself through a video which shows a guy, who looks like the Eddie Griffin's white bread "undercover brother", carrying big cardboard checks through a mall security checkpoint with forced goofy glee "Asseff"*** he'd won the lottery.  That is...if you consider  getting cents on the dollar to be winning the lottery!

You can take a "sharpie" to cardboard or constriction paper any day, but it doesn't mask the fact that there is a discount to match the size of the fake cardboard check.  Be very very cautious of these impulse promotions.

If you sell your structured settlement payment rights without serious consideration of the alternatives from someone unaffiliated with the company offering to pay you cash and without a well thought out game plan and you might just find yourself as "123 Lump Bum"

***inside joke hint, Michael Asseff owns 123 Lump Sum

"Champions" of Qualified Settlement Fund (QSF)... Pan Pan... Pan Pan

You could say that the Captains and NCOs from FORGE Consulting need to go back to flight school.

Check this out...

FORGE Consulting says: "FORGE is a champion of the Qualified Settlement Fund (QSF), a valuable tool for plaintiffs, which holds their settlements tax-free, giving them time to make what is likely the most important financial decision of their lives." Forge Consulting, LLC pearl of "wisdom" on its website.

FACT:  Earnings on settlement money that is held in a Qualified Settlement Fund (QSF) is taxed at the MAXIMUM FEDERAL TAX RATE, without the use of any of the lower tax brackets.

IRC 468B

(b) Taxation of designated settlement fund

(1) In general

There is imposed on the gross income of any designated settlement fund for any taxable year a tax at a rate equal to the maximum rate in effect for such taxable year under section 1 (e).

(g) Clarification of taxation of certain funds

Nothing in any provision of law shall be construed as providing that an escrow account, settlement fund, or similar fund is not subject to current income tax. The Secretary shall prescribe regulations providing for the taxation of any such account or fund whether as a grantor trust or otherwise.

• Have you put large amounts of money into a QSF with FORGE Consulting based on the FORGE CONSULTING representation that the settlement is held tax free in the QSF?
• And THESE are the guys that Presidential candidate John Edwards supposedly gives his "highest recommendation"?

More information about the Qualified Settlement Fund as a settlement resolution tool here

"All Things Being Equal" Lump Sum USA Present Value Doesn't Add Up

"Remember, according to the time value of money, a dollar today is worth more than a dollar tomorrow" Quote from the "wizards"  at Lump Sum USA whilst trying to "trip up" your financial security for deep discounts.

"The time value of money is the premise that an investor prefers to receive a payment of a fixed amount of money today, rather than an equal amount in the future, all else being equal.  Quote From Wikipedia.

The key to separating fact from fiction, to understand and grasp one of the fundamentals of finance, is the phrase "all things being equal". I can assure you that all things are not equal when confronting the flesh ripping incisors that Lump Sum USA wants to tear into the soft underbelly of your psyche and ultimately your financial security.

The present value theory is based on the premise that an amount of cash could be deposited in an interest-bearing bank account (or otherwise invested) from today to a date in the future and earn interest. Consequently, a person or entity lending money generally demands interest payments for use of their capital.

The Lump Sum USA statement fails to recognize that the amount that funds a structured settlement IS effectively earning interest and that is reflected in the structured settlement payments. Moreover there is an income tax exclusion on the structured settlement payments.  A dollar in hand today that is spent today on something that depreciates in value, is not worth more than a dollar in hand tomorrow. Furthermore since factoring companies like Lump Sum USA do not give equal dollars for future structured settlement payments (after you take into account the "effective discount rate" which includes their add on costs) their dollars may be worth substantially less.

A review of the Lump Sum USA site shows no address or phone number. A review of the whois records shows that the owner of this site has elected to remain incognito. I have warned readers that sites that show no corporate address and phone number should be avoided like the plague.

NOTE TO REGULATORS: Consider that it ne madatory that any advertising for structured settlekment factoring transactions include the legal name of the company and the address of the company.

Scales Hard to Digest When Dusted With Grey Matter

In S2 Industry, Circles with more than 360 degrees, Denham Grey "analyzes" an old Wisconsin Law Review paper by Washington and Lee Professor Adam Scales, an "expert" that Grey's pal Patrick Hindert "pimped" to The Society of Settlement Planners, Inc. in the opinion of this author, to justify HIndert's rampant promotion of factoring and the tacit approval of the practice by members of that association. (Scales ended up as a featured speaker at its 2006 SSP Annual meeting, later appeared as a speaker at the Nov 2007 National Association of Settlement Purchasers meeting and his name resurfaced in Hindert's review of the 2007 SSP Annual meeting on Beyond Structured Settlements) . Unfortunately Grey's analysis contains the following little piece of misinformation.

And I quote from Denham Grey blog--

"A settlement life-cycle

Scales points to an interesting quirk of legal wrangling. A traditional lump-sum settlement may be turned into a tax free structured settlement**, which can then (subject to State Structured Settlement Protection Acts) be converted into a tax free lump sum payment

   Folks, this is basic stuff!

**The fact is that a traditional lump sum settlement CANNOT be turned into a tax free structured settlement.

In case you're wondering...S2 is the knowledge workers' "secret code" for structured settlements

Impulse Sales language By Factoring Companies Should be Banned

Some factoring companies are pushing the envelope when soliciting structured annuity payment recipients to sell their structured settlement payment rights at a deep discount. Here are some examples of what comes up:

"Now there is no reason to languish for  years to get the money that you deserve as a plaintiff."     Capital Funders of America

"Tired of payments trickling in?"  Premier Time Investors, LLC (serve South Carolina)

"Whether you need money to pay bills, purchase a home, pay for school, or anything!"
Annuitypurchases.com

"Get the funds to make things happen in your life! A downpayment on a home, new business venture, maybe putting in that new kitchen you always wanted or maybe you want to go back to school. Why should someone else decide what's best for you?     R&P Capital Resources

"The funds from your structured settlements can make things happen in your life. Use the funds for a down payment on a home, a new business venture, to put in that new kitchen you always wanted or you may want to go back to school. What ever the reason- it's your reason and it's your money to do with as you choose. Why should someone else decide what's best for you?"       AllwaysFunding, a division of FDR Resources (firm also used "structured settlement quote" form label to cloud Internet search engine results)

"The funds to make things happen in your life! A downpayment on a home, new business venture, maybe putting in that new kitchen you always wanted or maybe you want to go back to school. Why should someone else decide what's best for you?  AAA Strategic Capital

State and Federal Regulators need to do something to stop solicitation and advertising that preys on irrational impulsive behavior.

State Insurance Regulators Missing Third Leg of The Stool

The Amendments to Viatical Settlement Model Act are very comprehensive, and will ultimately impact ALL aspects of the viatical settlement business, not just investor-initiated transactions (STOLI). The broad changes include

1. Enhanced compensation disclosure transparency rules**
2. new bonding requirements
3. prohibitions on what can and cannot be said in viatical settlement marketing materials
4. beefed-up rescission rights for policy owners. 

Now why can't state regulators get it together on structured settlement factoring transactions...particularly #1 and #3?

**This author believes that ALL compensation derived from a structured settlement factoring transaction should be part of a complete pre-factoring mandated disclosure, given the financial incentives that factoring companies are using to induce broker and attorney referrals. Is the broker who set up the structure taking a % of the deal to undo it? It's time that the brokers and attorneys in question stepped out of the shadows.

NASP 1999 Testimony Before House Ways and Means: Who Was Spinning Who?

by Structured Settlement Watchdog

Timothy J. Trankina, the founder and Chief Executive Officer of Peachtree Settlement Funding (PSF) in testimony before the House Ways and Means Committee March 18, 1999...under oath:

"Contrary to the message being "spun" by the proponents of the excise tax, on average, we charge discount rates of 18- 20% per annum. These rates are consistent with credit cards and other "b" and "c" lenders rates."

Download 20070509161857_001.001.pdf (see page 26 Paragraph H)

Download peachtree_absolute_assignment_2007.pdf

Download peachtree_absolute_assignment_1st_page_2007.pdf

Perhaps 8 years on, and 6 years after the seminal Victims of Terrorism Tax Relief Act of 2001, it's time for regulators to revisit any decisions based on Mr. Trankina's testimony.

All Hail Bronx New York Judge Alexander "Bites Yer Legs" Hunter!

by John Darer®  CLU ChFC MSSC RSP CLTC

When I was growing up, English footballer Norman Hunter had such a reputation as one of the harder and less forgiving defenders in the game that he was known as "Bites Yer Legs" Hunter. Today another Hunter deserves the accolade for his uncompromising and unforgiving effort to uphold the New York Structured Settlement Protection Act. 

1. "The failure of both the petitioner and Ms. Roman to disclose the two prior transfers to this court was misleading and dishonest and will not be tolerated."
2. 'Failure to make such disclosures in the future may be sanctionable."

Judge Alexander W. Hunter State of New York Supreme Court Bronx County  Part IA 23

In the Matter of the Petition of 321 Henderson Receivables Origination, LLC, Petitioner, and against Liana Roman, Prudential Insurance Company of America and Prudential Property and Casualty Insurance Company, as Interested Parties pursuant to GOL § 5-1701(f). 

207 NY Slip Op. 5092U

Click below for the full decision 

Download hendersonreceivablesoriginationllc_lianaroman_opinion.pdf

FOR YOUR INFORMATION----------->321 Henderson is an alter ego of JG Wentworth,  and a company whose tagline is the preposterous notion that it is the past present and future of the structured settlement industry. It's a non starter in the structured settlement industry. It also falsely advertises that it has been guiding the structured settlement industry for over 10 years. Consumers looking at deals from 321 Henderson need to know that this entity deals with funding brokered deals. This generally means less money in the consumer pocket.

Further reading on 321 Henderson

• Caddy on Wrong Fairway
• This Henderson is No Hall of Famer

Google Ad Crackdown Should Help Ease Structured Settlement Mistaken Identity Crisis

In "Ad and Subtract", the New York Post's Holly M. Sanders reports (5/23/2007) that Google is "cracking down on dubious Web sites that contain little content but lots of ads". Hallelujah!

These sites, commonly known as "splogs" or "made for Adsense" web sites frustrate the consumer to no end. These splogs and spam sites clutter up the Internet, divert online search results and increase the time to find legitimate information. Moreover, there's only so much a computer can do and often the relevancy of the ads was in question. For example, the Google programs apparently cannot discern the difference between a structured settlement company and a factoring company. This has assisted the likes of J.G. Wentworth and Novation Capital to each make false advertising claims that it is the leader in the structured settlement industry.

The owners of the sites in question make money in exchange for allowing Google to place "pay per click" ads on their web sites. Some of the sites had jumbled nonsensical excerpts of content from other legitimate sites. The jumbled nonsense often was designed purposely to frustrate so that the consumer was forced to the pay per click ads out of frustration and impulse. This author has personally experienced misappropriation of titles and large excerpts of content from this site used on splog sites. Google has now made an astute assumption that if they did nothing about it, their credibility as a search resource and vendor might be at stake.  Bravo, but this should have been done much sooner!

According to Sanders, Google has notified a number of web publishers that they will be dropped from the Google Adsense program starting June 1, 2007.

And there's more on Google's attempt to clean "the leaves clogging its gutter". On May 24, 2007 the New York Posts' David Andreatta reported that Google has taken a digitial stand against plagiarism. Academic paper-writing services will soon be forbidden from buying keyword terms through Google' AdWords program which will serve to prevent them from appearing in the sponsored link or "pay per click section" of search results.

Things seem to be improving, but there's alot more to be done. What are Yahoo and other search engine vendors going to do? Blogger Jenstar and others write that affected advertisers will likely regroup in the Yahoo space.

Is John Edwards-Forge Consulting Relationship Par For His Course?

In "The Continuing (Yet Incomplete) Education of John Edwards (Ongoing)" Tom Maguire's "Just One Minute Blog" asks, "Jiminy - Edwards voted for war in 2002 on the basis of faulty intelligence, took a job in 2005 on the basis of faulty intelligence - when does he start with the tough follow-up questioning?"

Perhaps the purported "testimonial" in which he purportedly gave Forge Consulting, LLC his "highest recommendation" may be spun by Edwards as another example of faulty intelligence.**

Presidential Candidate John Edwards is now "batting over a half ton" avoiding (for 2 months) the question of whether or not he does now or ever did engage Forge Consulting, LLC, (a significant Edwards campaign contributor,fundraiser and "pigs in blankets server") to place structured settlement business. Once again, for the benefit of new readers, Forge Consulting, LLC was established long after John Edwards became a Senator.

** for reference please see our library of posts on John Edwards,  Forge Consulting and Forge Consulting Issues and Opinions. See categories to the right.

To be continued...