Apparently bogarting the marketing strategy of that famous fast food chain one of the newest factoring entrants has been responding to compensation questions about referral fee compensation with what amounts to "have it your way". You can name your compensation. I heard this only this week from one of my industry colleagues.
It is well settled that referral fees are an add on to the cost of money and other expenses of the factoring company. Logically, the higher the compensation the worse the deal will be for the selling annuitant, even if the amount of cash on offer is better than a competing factoring company. Some clever factors could conceivably try to mask the issue by blocking out a certain amount for compensation that can be allocated between the company's representative and the structured settlement broker or financial adviser. To wit...one factoring blogger debating this issue wrote in the past that "it comes out of my (her)compensation".
The structured settlement watchdog, John Darer, has called for transparency in such compensation so that the variable component (that ultimately costs the seller) can be negotiated.
It is unclear the extent to which state court judges overseeing the structured settlement factoring transactions in the current system go into the granular details of compensation, or whether the current system simply assures that the selling annuitant can have even less to chew on, a double "whopper" off their payments, with "cheese". As previously written in this forum, the judge's responsibility is to determine if a proposed structured settlementt factoring transaction is in the seller's best interest (and the best interest of the seller's dependents, if applicable). The judge's responsibility is not to determine if the seller has the best deal. If that were the case then companies like Peachtree, which has been long associated with high discount rates, that feasts on those who fail to shop around, would probably not close many deals.