Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary

Why Leave "A Job You Can Never Be Fired From" That Pays You Tax Free Income?

by Structured Settlement Watchdog

Emerald Funding Corp of Secaucus, NJ casts a flawed stone on Valentine's Day with a structured settlement factoring "FAQ up". What Emerald Funding Corp claims on its web site:

"Isn’t it better to get less money up front with a consistent flow for my future?

Actually, NO, insurance companies make money on the interest your settlement generates and they do not pass along the investment income you make for them.  Research shows that you can amass greater wealth by arranging for a cash settlement, that is getting a lump sum of money, and then investing those funds independently.  Let’s face it, insurance companies would not “push” structured settlements if they were not more profitable for them".

Our Comments

1. Working with a Registered Settlement Planner or someone otherwise credentialed and experienced in dealing with settlement financial planning for injury victims can help an injury victim or wrongful death survivor work through what may be an emotionally difficult decision making process. An appropriate balance of cash, future periodic payments and other financial solutions can be established after listening to your needs.
2. A structured settlement annuity with a consistent flow is like a job you can never be fired from that pays you a salary that is income tax free and can include a guaranteed increase factor. In this economy who wouldn't be interested in that?
3. Emerald Funding Corp has it completely wrong by implying that you make no interest on the money that goes into a structured settlement. A look at any long term structured settlement proposal will show that you are getting far more money than is the initial cost of the structured settlement.
4. When banks issue CDs they make a margin on what they pay out to customers
5. When a new stock offering is issued through an IPO (initial public offering) the "tombstone" , a written advertisement placed by investment bankers in a public offering of a security, gives basic details about the issue and, in order of importance, the underwriting groups involved in the deal. Those underwriting groups take a fee.
6. If you read any prospectus for a mutual fund it will prominently display fees for investment management and administrative expenses.
7. We haven't even talked about investment volatility yet. Consider this post from February 4, 2010 Where Are You Going To Put Your Settlement Money Now? Imagine if you invested your net cash settlement proceeds on January 17, 2010, or September 1, 2008 and freaked.
8. And let's shove the Emerald throw away line about insurance companies would not "push" structured settlements (if it were no more profitable for them) right back in their face. There are slime bags in  Emerald Funding Corp's business sector that solicit people with "wet ink" structured settlements to sell, with the effect of the transaction on capital invested being possibly worse than the stock market losses in the fall of 2008. Believe us when we tell you Emerald Funding Corp and their ilk are in business to make a profit just like every business not labeled "non-profit" or "not for profit".
9. Factoring companies like Emerald Funding Corp ultimately depend on new structured settlements being created. Statistics contained in a statement made in the bankruptcy package Section 1125 filing submitted by the largest factoring company, JG Wentworth in May 2009 suggest that the percentage of structures factored is less than 5%.  Are companies like Emerald so desperate for business that they much make bogus advertising statements?
10. The US government is currently looking into ways to to encourage the use of annuities in retirement plans. Why do you suppose that is? Could the strain on the Social Security system be a reason? Read between the lines.
11. In closing, the Emerald Funding Corp website does not list its mailing address. I had to go to look at its website registration to find it. Why are they hiding it?

 

 

 

123 Lump Sum's Dubious Claims that " Easy as 123 You Get Your Cash TODAY

In the opinion of this author, Structured Asset Funding is one of the worst false advertisers of companies that purchase structured settlement payment rights from accident victims.  The company ought to be slammed by the Federal Trade Commission along with other false advertisers in the industry.

In the past I have highlighted how the company has advertised and continues to false advertise "fast cash now" despite a number of complaints to the Better Business Bureau that suggest otherwise by a long shot.

As previously covered the company's moral compass is skewed to include the solicitation of accident victims to sell their structured settlement payments to buy luxury cars and boats (i.e. depreciating assets)

The company also operates under the marketing name of 123 Lump Sum. In several commercials posted on Youtube.com the company makes the following dubious claim:

"Its as easy as 123 to get your cash today"

 

In the immortal but paraphrased words of Red Forman (above), 123 Lump Sum has "hung vacancy signs on their asses and the FTC should be looking for a room".

This is as heinous a false advertising claim as Peachtree's 2008 claim that it could get you "all your money now"

The Florida structured settlement protection act and the protection act of each state that has one requires Court approval of structured settlement factoring transactions. That process does not happen all in the same day a person contacts 123 Lump Sum, Structured Asset Funding or any factoring company.