by Structured Settlement Watchdog
Certain settlement purchasers are promoting a concept called restructured settlements or restructured payments as part of a "customized solution" for structured settlement payment recipients' actual or "promoter created" need.
How A Settlement Purchaser's Restructuring Scam Works
- Settlement purchaser engages in structured settlement trashing (why wait?, money held hostage, pictures of handcuffs, tumbleweeds)
- Settlement purchaser uses misleading and possibly unlawful single interest rate investment projections for "what you could get" by investing the "large lump sum" you could get from them, with an investment firm or bank with whom the settlement purchaser has a business relationship.
- The use of the term large lump sum itself is misleading, because it is at a substantial discount off the discounted present value of the payments.
- Some settlement purchasers attempt to paper over the projections with disclaimers. The mere idea however, that some use their company letterhead to make misleading and possibly unlawful investment projections to induce gullible and unsophisticated people to sell away their long term financial security is telling.
- Few, if any, of the actors providing the inducement are licensed to provide insurance or financial advice.
One of our sources suggests that settlement purchasers are calling the above series of steps a restructuring of the structured settlement.
The use of the word restructured is misleading. When "restructured" is used in connection with "structured settlements" it appears at first blush, that there is some connection between the two. THERE ISN'T. It's a scam the way it's being promoted by the settlement purchasers to injury victims.
Structured settlements have unique benefits set forth in the tax code. To do a so called "restructured settlement" you must sell your structured settlement payment rights AT A DISCOUNT, which might be substantial, BEFORE other products are purchased to create a new payment stream with the discounted amount of money.
While structured settlement is a defined term under the Internal Revenue Code, the Code makes no mention of restructuring structured settlements
My previous blogs on "Restructured Settlements"