by John Darer CLU ChFC MSSC RSP CLTC
The National Structured Settlement Trade Association (NSSTA) is FINALLY getting into the public discussion of factoring business practices.
The NSSTA posted a video featuring US Senator Dick Durbin that was recorded earlier this year to counter the expected annual holiday season "flea market" for structured settlement payments created by some of the seedier cash now pushers.
The video presented is primarily about pay day loans, which were cited by Durbin to have interest rates as high as 358%. He says they should be outlawed. I agree. I have to say however, that I am a little bit embarrassed as an NSSTA member for the unintended "trompe d'oeil" in the presentation that accompanies the video of Durbin's speech:
"After citing examples of interest rates as high as 358 percent charged by pay-day loan operators, Sen. Durbin declared that such practices should be outlawed. "The same is true when it comes to factoring [of structured settlements]," he said. "There are just certain practices we shouldn’t be afraid to say are wrong."
The implication is that factoring rates are in that sort of range. I don't believe that this is what the Senator intended to imply because it is simply not true even in the worst factoring cases. Discount rates should be fair. Some factoring companies, however, do have ethical business practices and should not be lumped in with the reprobates.
Without enumerating NSSTA states "many of the nation's leading disability rights groups, including the American Association of People with Disabilities and the National Organization on Disability, have publicly called attention to the questionable practices of these factoring firms".
NSSTA goes on to say "Forty-seven states and the federal government have enacted structured settlement protection statutes that establish strict conditions for structured settlement factoring transactions. Under the federal law, court oversight and approval is required for anyone who chooses to sell payments from a structured settlement to a third-party company".
All true, but rhetoric and the structured settlement protection acts only go so far, in my opinion.
How about publicly highlighting specific practices that need greater oversight?
Top of the list in my opinion is:
Cash now advertising. The FTC needs to get involved and punish companies which continue to advertise "Fast Cash Now" despite a number of complaints which call that very claim into question. If companies continue to do so because of lack of or unenforced regulation then something has to change. Irony of ironies the NSSTA post has already been tagged by a website called Cash For Structured Settlement.
Including in the above should be some recourse against unlicensed individuals and website hosts, including e-zines that make money off misinformation peppered about by the unlicensed, unqualified individuals who shun accuracy for the quest of pay per click profit.
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