by John Darer
New Leaf Structured Settlements admits that "a lot of people are concerned that selling the structured settlement payment means losing money".
Here's their comeback in "Selling Structured Settlements to Unwind the Mistake" 5/22/2012:
"At New Leaf, we believe that like everything there is a significant opportunity cost being lost when you hold a structured settlement until maturity. In other words, by selling the structured settlement payments for a lump sum, you can put your money to work for your immediately. While it is true you will not receive the total aggregate lump sum of all your future payments combined from any settlement buyer, the finances currently work that allow you to get an incredibly large amount of money that you can utilize immediately".
As some of my colorful friends from out West might say "that's happy horse sh*t!"
New Leaf Structured Settlements skirts the issue
FACT: You WILL LOSE MONEY if you sell your structured settlement. The only question is "how much?"
FACT: Your money IS working for you with a structured settlement. For example, the other day I spoke to a client about a structured settlement I set up in July 2007 with Prudential that has an income tax free internal rate of return that is almost 2.7 times today's 10 year taxable Treasury Rate. And CDs and money markets are paying very little interest.
FACT: "Making your money work for you" must first make up the money you will lose by selling your structured settlement
FACT: Opportunity cost IS NOT a guarantee of a return on your money. How's that Facebook stock doing? Down 15% since the IPO, at time of posting. Ask any Arizona or California homeowners who took the advice of a "cash now pusher" and sold their structured settlements to finance down payments on new homes in 2007-2010. These people got whacked when they sold their structured settlement and got whacked again when the real estate market tanked
Look, structured settlement factoring is legal. But while selling a piece of your structured settlement may prove to make sense in some circumstances, do it for the right reasons, with proper independent advice, not because of some half-baked sales pitch.
While judicial approval is required to sell your structured settlement payments, consumers must realize that the solicitation and advertising to structured settlement annuitants about the sale of structured settlement payment rights is unregulated. There is no licensing requirement and its apparently too small potatoes for the Federal Trade Commission (FTC).
New Leaf Structured Settlement states "lucklily, (they) have the ability to facilitate your ability to unwind the structured settlement payment stream at (sic) get a lump sum". So do a lot of companies that don't make outlandish statements like we've cited above. Surely there's room for "turning over a New Leaf".