by Structured Settlement Watchdog
The National Association of Settlement Purchasers ("NASP") held its recent annual meeting in Washington DC. NASP's 2007 Educational Program - is described by Patrick Hindert of S2KM "as a learning conversation about "The Structured Settlement Market"". Metaphorically speaking, the concept is like pillagers getting to know those they have left in their wake. Excuse me while I extend my middle finger and twist it in the wind.
One wonders how really open the "learning conversation" can be when you invite (for the second year running) "factoring back slappers" like Patrick Hindert. According to my sources I was deemed to be, let us say "too brutally honest". I would have readily walked into the hyena's lair and faced those whose business practices I have been critical of, if I felt it might actually make a difference to consumers. Why don't the NASP have any guts?
Here's some of what they missed:
- While this author believes that factoring has its place and that there are some responsible companies, a lack of suitable regulation has resulted in the marketing and advertising practices of a few have jaundiced the view of the many.
- The mischaracterization by certain factoring companies and certain settlement professionals "on the vig" that IRC 5891 made factoring legal
- The idea that NASP allows Woodbridge Capital to incent people to destroy their structured settlements with items that would be considered illegal inducements by regulators of those that create the structured settlements in the first place.
- The idea that NASP allows a factoring company to operate as structured settlement-quotes.com and now settlement quotes.com which manipulates the words a "quick settlement process" to describe a factoring transaction
- The hijacking and deliberate misuse of financial terms related to structured settlements, such as "structured settlement quote" and "certified structured settlement consultant"
- The apparent and embarrassing patronage by some of part time pay per post affiliate marketers and so called "Google Adsense Carpet Bombers"
- Lack of mandatory disclosure regulation is going to cause a huge scandal that is ready to rock the primary side of the industry. That is the amount of money being taken out of selling structured settlement annuitants' pockets through the needless build up of the effective discount to pay settlement professionals, structured settlement brokers and structured settlement firms who do not disclose these fees on their websites or in other marketing materials. In the case of an annuitant who has got themselves in debt and is using the factoring to get cash to help pay off or pay down that debt If the settlement professionals didn't build in a fee the annuitant would have more money to pay off the debt. By offering to pay these fees NASP members are enabling this phenomenon and pouring gas on the scandal fire. Confidential sources suggest that a shocking percentage of settlement professionals who refer business to factoring companies are "on the take". For some its the matter of "if they're gonna offer it, I'm gonna take it" (right out of the annuitant's mouth).
- With all due respect to Associate Law Professor Adam F. Scales and his overplayed 5 year old paper, Against Settlement Factoring? The Market in Tort Claims Has Arrived, 2002 Wisc. L. Rev. 859, it's time to put him and his 2002 paper out to pasture. According to his Washington and Lee law school bio, since 2002 this Phi Beta Kappa has had the inspiration to pen "How Much Is That Doggy In The Window?" and "Can this Pig Fly?"
- Where are the ethics in the abhorrent practice by certain factoring companies of soliciting structured settlement factoring transactions before the annuity contract has been issued or within the first few years. At least the much targeted Allstate AFEN commutation program has a 2 year carve out. Why isn't NASP setting an example?
- The purported methodology used by JG Wentworth to get structured settlement brokers to appear in its "Present Value" news brief
- The fact that Sian Owen of Strategic Capital has demonstrated that she is not a person of her word. Prior to the Woodbridge "amusement park style incentives", Strategic Capital offered opportunities for selling annuitants to win a trip to Hawaii. Months ago Owen fretted that we had associated Strategic Capital with the likes of JG Wentworth in a post on this blog. She said that the trip preceded her involvement with the company. Yet she has failed to deliver on a promise to supply this author with the statistics of how much new business resulted from the Hawaii incentive.
- What does it say about NASP when Novation Capital (whose President Robin Marc Shapiro is 2007 new President of NASP) STILL posts on its website: (i) "Testimonials on "the structured settlement process" "from our customers" that mischaracterize what the structured settlement process really is; (ii) Uses the term "Free structured settlement quote" that mischaracterizes what a structured settlement is and falsely advertises what is does not (structured settlement quotes) instead of what it does ( structured settlement factoring quotes) enabling it to capture cases of mistaken identity; (iii) in its answer to the question "why are settlements structured?" , Novation devotes 1/3 of its answer to alleged deception on the part of certain parties to "make settlements look bigger" while omitting the significant favorable tax benefits and spendthrift provisions embodied in structured settlements; (iv) falsely claims it is a leader in structured settlements vs factoring transactions; (v) uses the deceptive marketing gimmick of "50 years of combined experience" to promote itself in an industry segment that's essentially less than 20 years old.
- On the other hand NASP taking Symetra's side against Rapid is a positive, in my opinion.
- The fact that some NASP members have made an effort to clean up their Internet marketing is a positive, in my opinion.
- The fact that some NASP members are not afraid to refer to structured settlement factoring is a positive, in my opinion
- Companies that provide consistently reasonable discount rates are going to be better perceived, in my opinion.
- JG Wentworth has finally splurged on "new duds" for its spokesman. He's somewhat less annoying but no less memorable.
In November 2010, the structured settlement watch dog, John Darer, was invited to and attended the National Association of Settlement Purchasers annual meeting in Las Vegas, NV and participated in a successful industry wide panel concerning the primary market.