by John Darer CLU ChFC CSSC RSP CLTC
A John Hancock structured settlement annuitant was told that she should sell the rest of her structured settlement payments through scare tactics using false information that John Hancock was going out of business. The Georgia woman was then allegedly solicited and proceeded to enter into a business deal with the former employee of the structured settlement factoring company.
Of course John Hancock was not going out of business when this unfortunate annuitant was solicited, In March 2013 John Hancock merely ceased writing new structured settlement annuity business. The withdrawal did not mean that John Hancock would not service its existing customers.
Following my conversation with the alleged victim I asked a senior executive of one of the NASP member companies how they handle payments to sellers. My contact stated that as part of quality control his/her firm will not deposit money into an account for a seller, other than the account of the individual. They will not deposit to any joint account that is not joint with a spouse. Moreover the company follows up with the seller's bank to make sure that the money has been posted to their account.
Structured settlement transfer petitions, which require a judge's approval, are often heard in open court. The executive related how others in the courtroom for unrelated cases, hear the numbers being discussed and one or more occasions the sellers have been approached by random people in the courtroom seeking handouts from the seller of the structured settlement payment rights who has just received discounted lump sum because they had their own financial needs.
While not related to the Georgia lady's situation described above, in March 2013 a website tied to Vancouver Canada based Genex Capital actually issued nationally syndicated press releases targeting Allstate and John Hancock structured settlement annuitants. In the aftermath of the AIG bailout 2008 another secondary market player publicly targeted annuitants of AIG subsidiaries with scare tactics to induce them to sell prematurely, to their detriment.
The Georgia woman's story is unfolding and it is not very pretty. If Congress and state government legislators do not up their game on this I fear that consumers are going to be hurt like this lady purported to be.
In the meantime those that are or were solicited by anyone to sell theirJohn Hancock or Allstate structured settlements with scare tactics based on false information about these companies' demise should consider making a report to the Federal Trade Commission and/or their state consumer reporting agency. I referred the Georgia woman to a United States Attorney.
If you have no other alternative but to sell structured settlement payments do not sell more than you need to solve your current predicament. Thoroughly check out who you are doing business with and make sure their credentials are valid.