by John Darer® CLU ChFC MSSC RSP CLTC
Structured settlement payment rights offered to investors are also known as structured settlement derivatives, recycled structured settlements, factored structured settlements and by the scam label secondary market annuities.
Structured settlement payment rights are the rights to receive payments from a structured settlement. There are critical differences to Investing in structured settlement payment rights compared to buying an annuity. A factored structured settlement is not an annuity. Structured settlement payment rights can be transferred to a buyer subject to a court approval process. The rate of return is illustrated as higher because the seller has agreed to a discount.
A number of firms misrepresent structured settlement payment rights online as annuities. Other intermediaries make unauthorized use of life insurance company logos of annuity issuers in a misleading way so that they can profit off the trademark and brand of the insurer in a transaction that can go wrong. Until I posted about it, SHP Financial , of Plymouth MA, did the latter and even grossly misprepresented in still live Tweets on two occasions, that the payment rights were "just like a CD".
The Washington DC office of the international law firm of Hogan Lovells, has issued a useful memorandum to members of the National Structured Settlements Trade Association about the marketing and distribution of structured settlement payment rights. Download Hogan_Lovells_Memo_Marketing_and_ Distribution_ of_Factored_ Structured_ Settlement_ Payment_ Rights_April_ 5_2014
If you are currently a plaintiff in a lawsuit or an attorney seeking to structure fees and have been solicited to buy structured settlement payment rights as part of the solution, you should read the memorandum. The Hogan Lovells memorandum shares the differences between structured settlements and structured settlement payment rights and cites avariety of legal cases which show that transactions to buy structured settlements in the secondary market can go wrong.