by John Darer CLU ChFC MSSC RSP CLTC
"Cash now pusher" has been a "term of affection" attached to settlement purchasers, a nod to the "watchword" of their profession's ubiquitous advertising, for more than a decade. The predatory manner in which some settlement purchasers elicit and prey on addictive behaviors and attempt to hook some annuitants from a psychological standpoint, to capitalize on those exhibiting impaired decision making skills . For some targets "cash now" is marketed as a financial "amphetamine", an " upper" that will make everything right and enable the victim to live their dreams. It's an empty promise.
Upon information and belief less than 10% of structured settlement annuitants sell their structured settlement payment rights, however those that do may engage in multiple transactions, sometimes as many as 5-6 in a very short period of time. As a result some are left destitute.
Once some annuitants get a taste of the "cash now" "amphetamine" is it:
- they simply can't stop selling
- they are induced legally to keep selling
- they are induced illegally to keep selling
- they lack a proper financial education
- they lack a proper financial education and are undergoing transition stress
- they have a proper financial education but they undergoing a form of transition stress?
- they are discouraged to get independent professional advice "because it will take longer"?
I will be examining these questions and more in coming blog posts which (in light of the above) will include real life stories that will stimulate important questions for debate:
- Is the current system of structured settlement protection acts adequate?
- Are structured settlement protection acts being adequately enforced by judges?
- Are there jurisdictions where enforcement could be improved? What should these improvements be and how should they be implemented?
"In many states, you can sell your rights to periodic payments to a company that will pay you a lump sum today. Doing so, I realize, is tempting, but it's typically not smart".- Suze Orman
Studies show that people with low self-esteem engage in more impulse spending and buying things they don't need. (Source: About Money).
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