by Structured Settlement Watchdog®
Nobody likes the idea of court scraping by settlement purchasers except those doing the scraping. I'm not necessarily a fan of scraping, but I feel it important to digest what both sides have to say and present an idea or two that may make sense.
Why Court Scraping Exists
The reason that public records are public is so we can monitor our government. Public records provide notice to all members of society of the official actions taken by government. They also provide notice of the "official" status of individuals and property. Making public records accessible to citizens via the Internet is a powerful way to arm people with the tools to keep government accountable.
A 2002 paper by the Privacy Rights Clearinghouse Public Records on the Internet: The Privacy Dilemma was prescient to many of the issues we face with the court scraping issue. It's an interesting read, most recently revised on March 18, 2015.
So here are a couple of reasons I've heard used in an attempt to justify scraping of court records:
- Saving of client acquisition costs. Instead of finding the proverbial needle in the haystack, you can locate someone is a known candidate because a petition has been filed to transfer structured settlement payment rights in a court near you.
- The noble reason propounded by some settlement purchasers is that court scraping informs a seller that hasn't shopped, that by shopping they may be able to get a better deal. A source of irritation for the gazumped structured settlement buyers, some of whom have taken to filing cases under seal to wall off the competition and enable them to wield the proverbial rusty brush. When it comes to selling structured settlement payment rights, the annuitant is selling payments at a discount, sometimes substantial. Getting more cash for the payments rights, or having to sell less of them to meet the seller's immediate need is a preferable solution isn't it?
Lack of regulation is the root of all evil here in my opinion.
The real problem with scraping is what is done with the scraped information and the business conduct of certain structured settlement buyers which, unfortunately is entirely unregulated.
- There should be a moratorium on solicitation of non-minor structured settlement annuitants for a minimum of 2 years from the time a structured settlement is established, measured from the annuity contract or certificate issue date. Consider that inappropriate solicitation of air crash accident victims' families led to the enactment of the Aviation Disaster Family Assistance Act of 1996, Pub. L. No.104-264, 110 Stat 3213 (codified at 49 U.S.C. § 1136 (2006)) and Pub. L. No. 106-181, § 401(a)(1), 114 Stat129 (codified at 49U.S.C. § 1136(g)(2) (2006)) prohibiting solicitation of legal retainer agreements for initially 30 days and later 45 days. No good can come of soliciting "wet ink" structured settlements. The result will be a massive loss of capital 100% of the time.
- There should be a moratorium on any approach or solicitation of minors (and their parents during the time period they are minors) until AFTER the minor has reached majority with severe penalties for violations. I recently received a call from someone whose 16 year old son was solicited directly by a cash now pusher. The settlement purchaser is helping nobody except himself and his company.
- Cold drop-ins at annuitant's residence obtained from scraped court records, or otherwise, should be prohibited
- Those with criminal records should not be permitted to operate in the structured settlements secondary market in any capacity.
- Door to door solicitation should be prohibited
- Financial gifts should be limited to a nominal amount as in other financial industry segments.