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January 19, 2019

National Association of "Settlement Providers" | What Settlement Purchasers' Makeover Reveals and It's Not All Good

by Structured Settlement Watchdog

The National Association of Settlement Purchasers has updated its website. While more modern and informative, it's not all good.

The Good

NASP Membership is a privilege held in the legal name of the approved entity which is the member. A member may refer to itself or may designate a single affiliate or fictitious name as the brand holding itself out to the world as a NASP Member in communications, marketing materials, or other manner.

This membership requirement however does not seem to reign in companies from using marketing networks as CBC Settlement Funding has done, which through Annuity.org, Structuredsettlements.com and Sellanyannuity.com, do a disservice to the public with inaccurate poorly researched information.

What's Wrong with National Association of Settlement Purchasers?

  • The title tags for the website that appears in web searches as the National Association of Settlement Providers is not an accurate refection of what its members do. NASP members do not "provide settlements", they purchase structured settlement payment rights. This misrepresentation however, does not carry to the home page of the NASP website.
  • One of Silo Headings is "Settlement Options".  Nothing that any NASP member does has to do with settlement options. It has to do with structured settlement factoring options or liquidity options, of which NASP members offer different versions of the single factoring option. For example  selling all or part of your structured settlement payment rights is not a settlement option at all. 
  • The NASP membership roster includes Rightway Funding of Ft Lauderdale Florida  ( deemed a "structured settlement factoring parasite" by NASP member DRB Capital LLC in a press release related to a recently filed legal complaint in Palm Beach County Florida) and the financial rapists of Cedric Thomas, Novation Funding.
  • NASP has framed a fair discount rate as a range between 9% and 18%, which is intellectually dishonest. Consider that Allstate annuitants can get an 8% discount rate under its Advance Funding Exchange program and Berkshire Hathaway annuitants can get a 6.5% discount rate, you have to raise you hands and sigh (in unison) " WTF?" The NASP stated range is a range that is good for investors and securitizations not annuitants.

Annuitants shouldn't use 9%-18% as a frame of reference even if not receiving structured payments from Allstate of Berkshire Hathaway.There are plenty of deals that happen with dIscount rates as low as between 5-7%.  A 2-4% difference on the low end could mean significant money in pocket to the selling annuitant or less to be sold to achieve a financial goal that is unachievable any other way. It could mean tens of thousands, hundreds or thousands or even millions of dollars. Take the Cedric Martez Thomas"financial rape" by NASP member Novation Funding in October 2015 for example. There was an estimated $1.4-$1.5 million profit spread that Novation took from a young black man from New York.  One should question doing business with any settlement purchaser who tries to hurl that tripe.

Revealing Commentary | Double the Factoring, Worsening Behavior of Market Participants and Still No Regulation

In 2013, Matt Bracy, a Dallas lawyer and former President of the National Association of Settlement Purchasers, former General Counsel to Settlement Capital and then of the law firm of Nesbitt Vassar McCown stated is a message appearing on the Synergy Settlement website"...an estimated 5% of structured settlement recipients at some time find that they need liquidity" 

In 2017, two years ago, as I reported, it was 15%

Now in 2019, the number is less than 20%. If that is a real statistic what could be the explanation?

  • More aggressive sales tactics?
  • Math is not one of Matt Bracy's better skills?
  • A deliberate attempt for an industry whose skeletons are coming out of the closet with regularity now, to spin the true facts to fly under the radar of legislators and trial lawyers?
  • The passage of time and the greater universe of structured settlements ready for exploitation by structured settlement factoring companies?

The intervening time frame has seen a flabbergasting amount of outrageous business conduct including criminal business conduct.  To its credit, NASP recognizes some of this activity

NASP member DRB Capital, LLC  announced January 15, 2019 that " as part of its continuing efforts to uncover and stop structured settlement fraud, the company has filed a complaint against NASP member  Rightway Funding LLC, BTG Advisors LLC, Sempra Finance LLC, Greenwood Funding LLC, and JLC Capital Funding LLC in Palm Beach County, Florida".DRB Capital recently established the "Stop Structured Settlement Fraud" bounty program and tip line to pay awards totaling up to $100,000 to reward individuals who come forward with information proving violations of various laws in connection with the business of purchasing structured settlement payment rights. Violations include violations of state structured settlement protection acts, improper forum shopping, violations of state and federal deceptive and unfair trade practices act, and federal excise tax evasion.  See Stop Structured Fraud.

Read my Structured Settlement Watchdog commentary

 

 

 

 

 

 

Posted at 03:18 PM in Factoring Company Bad Business Practices, National Association of Settlement Purchasers (NASP), Structured Settlement Factoring, Structured Settlement Factoring News, 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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    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 .
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    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.
  • Structured Settlement Quote Lock-Ins | What You Need To Know
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  • What Are Structured Settlement Annuities?
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  • 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.
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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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Why Take a Structured Settlement?

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