by Structured Settlement Watchdog
A NASP member company has apparently recently paid a structured settlement broker $50,000 to secure the names and details of structured settlement annuitants, according to our sources. Times are tough and the $50,000 payoff surely was good Christmas bounty for the structured settlement broker.
The questions are:
(1) was the alleged acceptance of the $50,000 payment ethical on the part of the structured settlement broker?
(2) was the information allegedy shared "protected information? and, if yes
(3) was the alleged acceptance of the $50,000 payment, violative of any covenants between the structured settlement broker and (a) the annuitants whose information was shared; (b) the life insurance companies to whom the broker holds appointments; (c) the life insurance companies or other financial entities to whom the broker's wholesaler or general agency holds appointments [see Gramm Leach Bliley below];(d) the insurers who paid for confidentiality agreements
(4) Is the structured settlement broker a member of NSSTA, or SSP? What do these organizations have to say about such a transaction, if made by one of their members?
Is this worthy of an investigation? Stay tuned folks.
The following may be helpful as a starting point for further discussion
Gramm Leach Bliley Act Privacy
Under the GLB, financial institutions must provide their clients a privacy notice that explains what information the company gathers about the client, where this information is shared, and how the company safeguards that information. This privacy notice must be given to the client prior to entering into an agreement to do business. There are exceptions to this when the client accepts a delayed receipt of the notice in order to complete a transaction on a timely basis. This has been somewhat mitigated due to online acknowledgement agreements requiring the client to read or scroll through the notice and check a box to accept terms.
The privacy notice must also explain to the customer the opportunity to ‘opt-out’. Opting out means that the client can say "no" to allowing their information to be shared with affiliated parties. The Fair Credit Reporting Act is responsible for the ‘opt-out’ opportunity, but the privacy notice must inform the customer of this right under the GLB. The client cannot opt-out of:
- information shared with those providing priority service to the financial institution
- marketing of products or services for the financial institution
- when the information is deemed legally required.