by Structured Settlement Watchdog™
Novation Ventures has filed an anti-trust law suit against settlement purchaser JG Wentworth Company and Peach Holdings, seeking damages in excess of $15 million. All IS NOT well in the world of the National Association of Settlement Purchasers, a trade group in which JG Wentworth, Peachtree and Novation are members.
JG Wentworth/Peachtree Controls 75% of the market
Paragraph 17 of the complaint: "There are only a handful of companies competing for the factoring of structured settlement payment rights in the United States. Post-merger, JG Wentworth is by far the largest, with a market share of about 75%. Novation has a market share believed to be no more than 7%."
JG Wentworth acquired Peachtree in August 2011. Since the merger JG Wentworth has controlled Peachtree branding, advertising, marketing, product offerings, and transaction pricing.
What is The Sherman Anti-Trust Act?
Passed in 1890, the Sherman Antitrust Act was the first major legislation passed to address oppressive business practices associated with cartels and oppressive monopolies. The Sherman Antitrust Act is a federal law prohibiting any contract, trust, or conspiracy in restraint of interstate or foreign trade.
What is the Clayton Act?
The Clayton Act gave more enforcement teeth to the Sherman Antitrust Act. Passed in 1914, the Clayton Act regulates general practices that may be detrimental to fair competition. Some of these general practices regulated by the Clayton Act are: price discrimination, exclusive dealing contracts, tying agreements, or requirement contracts; mergers and acquisitions; and interlocking directorates.
The Clayton Act is enforced by the Federal Trade Commission (FTC) and the Department of Justice (DOJ).
Allegation That Consumers and Judges ARE NOT Told of the JG Wentworth/Peachtree combination
Novation Ventures claims that consumers and courts are not told of that JG Wentworth and Peachtree are one and the same: commonly owned and controlled; they allege that the Defendants pretend to (but do not actually) compete with each other.
Allegations Regarding Google Adwords
Novation Ventures alleges that by coordinating their Google Adwords "pay per click" bidding and budgets, JG Wentworth and Peachtree are able to consistently grab two of the top three or four search listing results on many of the key words used by consumers . This behavior crowds out competitors and/or drives up the cost of being in second or third position in any given search ranking, making it more difficult and expensive for Novation (and others!) to be found by potential customers looking for genuinely competing offers. And, it has been alleged that this behavior also harms consumers , who are led to believe they are shopping among competing alternatives when they are not"
Note: as shown in my 2014 year end video podcast about the chronic problems in the structured settlement secondary market I demonstrated that some of the most popular structured settlement keywords bear prices in excess of $250-$300 PER CLICK!
My "favorite Monopoly piece" posing and displaying that he's quite frugal!
While not naming them in the Anti-Trust complaint, Novation also blasts Google as a "conscious and willing participant with JG Wentworth and Peachtree" and states that Google "has played and has continued to play a crucial and necessary role in enabling this 'scam' on the public, competition , and competitors and by causing overpayment of huge sums by consumers while profiting handsomely from the above-described deception it creates".