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August 07, 2016

Structured Settlement Purchasing Fraud | Kicking The Can Down The Road

by Structured Settlement Watchdog

A massive structured settlement payment purchasing fraud has been perpetrated against vulnerable American consumers.   If the fraudulent deals, of which the tip of the iceberg suggests there are many, eventually result in vacated court orders for failure to comply with the relevant structured settlement protection act:

  • Life insurance company will have to restore payments to the original annuitant.
  • The original annuitant, who received pennies on the dollar may not have enough money to pay back what they received
  • The investor may find that the company they were dealing with when the investment was made, has crawled under a different shell. folding the tent on the original shell.  Several companies operate with many shells, one purportedly with almost 300 shells!   Errors and Omissions insurance is not easy to get for structured settlement factoring companies.

To be clear I am referring to the secondary market, NOT the stage where structured settlement is a established, when a lawsuit is settled.

The fallout from the massive structured settlement purchasing fraud that occurred could mean the following:

  • Retirees who purchased structured settlement payments rights are going to get screwed
  • Retirement plans who purchased structured settlement payment rights are going to get screwed
  • Personal Injury victims who have been sold recycled structured settlements by settlement planners, in some cases instead of a regulated structured settlements, are going to get screwed
  • Money will be traced to lobbyists for the bad actors and the politicians they contributed to.
  • Lawyers who advised on these deals may get disbarred if they knew of the fraud, let papers perpetrating the fraud to be submitted to court and let it happen multiple times on their watch, while they raked in hundreds of thousands of dollars in fees.
  • Consequences for financial advisors and those settlement planners who failed to do due diligence.

The moral dilemma pits the victims against each other,  the Mom and Pops and retired dentists who invested large amounts of their life savings in a derivative of a structured settlement, against injury victims who were raped for pennies on the dollar for their payments, fostered by toothless regulation that does not require a license to sell, where there is no regulator and there are no meaningful consequences for financial predators and financial rapists. Despite recent changes in Maryland, Illinois, Virginia and a few others, the situation is getting far worse, not better as regulation moves slow and none of the regulation addresses solicitation and sales practices.

Posted at 09:27 AM in Factoring Company Bad Business Practices, Structured Settlement Factoring, Structured Settlement Factoring News, Structured Settlement Payment Rights, Structured Settlement Transfers, Structured Settlement Watchdog® |

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Guide to Structured Settlements 2024

  • What is a Structured Settlement? What You Need to Know
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  • Top Structured Settlement Annuity Companies 2024
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  • Treasury Funded Structured Settlements
    Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales and other non qualified structured settlements.
  • Compare Structured Settlement IRR to Other Settlement Alternatives
    Use the Taxable Equivalent Yield chart to help compare the Internal Rate of Return (IRR) of a structured settlement to other alternative or complementary investments. Need help with the chart? Call 4structures.com® LLC at 888-325-8640
  • Structured Settlement Payments | Types of Structured Settlements 2024
    Ways You Can Structure Your Settlement Payments in 2024. With a structured settlement you can have more than one type of payment in a single contract. Different types of structured settlement payments can be customized and combined to meet your needs on a stand-alone basis, or in conjunction with other financial products. Diversify your structured settlement, if you wish, by funding with more than one annuity issuer, with treasury funded structured settlements, index linked structured settlement payments and market based structured .
  • Structured Attorney Fees for Tax Deferral for Attorney Contingency Fees
    Structured attorney fees is a financial strategy that offers a unique way to defer taxes for lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure their settlement. There are multiple ways to structure your attorney fees, such as capped or uncapped index linked structured settlement annuities where payments are adjusted based on upside changes in the S&P 500 or another index, Trial Lawyers may also use a special deferred pay/deferred compensation arrangement, if market based returns returns are desired with no cap. Plan NOW for year end! Put structured attorney fee expert John Darer® on your settlement planning team in 2024.
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    Receiving structured settlement payments from your own structured settlement or inherited structured settlement? You'll like this huge time saver. Click the title for a link to a comprehensive list of customer service telephone numbers that includes both current AND former structured settlement annuity issuers and reinsurers. If you have simple bank or beneficiary changes, or if the insurance company that issued the structured annuity has merged, sold or spun off its block of structured annuity business (e.g. Aviva, Allstate, Transamerica, AEGON, GE Capital, Liberty, CNA, Confederation Life), oran annuity issuer has changed its name and you're trying to track them down. Here you go! The list is regularly updated. Last updated May 20, 2024.
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  • What Are Structured Settlement Annuities?
    Structured settlement annuities are annuities that can provide one or more customized annuity payment streams in a single contract. Read about structured settlement annuities here.
  • History of Structured Settlements
    Tracing the roots of structured settlements history from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as a core personal injury settlement planning tool to the present day.
  • What Are Market Based Structured Settlements?
    Market based structured settlements are an alternative or supplementary structured settlement solution for the plaintiff, attorney or law firm that: 1. Can afford to take some market risk 2. Have discretionary settlement dollars. Claimants and attorneys alike may find that market-based structured settlements provide the opportunity to receive tax-free income, or tax-deferred income, while enjoying growth potential.
  • iStructure |Uncapped Fixed Index Structured Settlement Annuity
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  • Structured Settlements and Longevity Risk| What Are the Odds?
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Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
    Qualified Settlement Funds | What You Need to Know
  • Firmwide Qualified Settlement Funds Debunked
    Firmwide qualified settlement funds have been heavily promoted to trial lawyers, but have been debunked in a detailed analysis in a July 2022 legal opinion a tax partner at the law firm of Faegre Drinker Biddle & Reath, LLP. Trial lawyers and firms who have established Firmwide QSFs or coinsidering establishing a Firmwide QSF should read the analysis as part of their evaluation.

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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
  • When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly
  • Be aware that financial advisors use of testimonials is prohibited or restricted
  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
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