Do lawsuits against structured settlement buyers represent the start of a new trend that will ultimately lead to reform of structured settlement protections that have been enacted in 48 states?
On April 17, 2015, Annuity.org, which is upon information and belief, exclusively associated with CBC Settlement Funding, claims that "the type of transfers made by Terrence Taylor and Michael Lafontant are often prevented by regulations in the secondary annuity market". While admitting that there are predatory annuity purchasers in the business, Annuity.org says "most settlement purchasers do not pressure sellers into ill-advised decisions only to have judges approve transactions that leave sellers financially vulnerable".
Annuity.org observes that the two lawsuits share similarities that contributed to the plaintiffs’ financial demise:
- Judges approved transactions without disclosure of previous transfers
- The sellers sold payments in states where sellers are not required to appear in court
- Both involved companies with documented complaints of not following guidelines from the National Association of Settlement Purchasers [ in both the Taylor and Lafontant cases, the majority of the transactions were with Defendants which are, or are associated with, or acting through, members of NASP*]
- Factoring company employees solicited sellers, encouraging reckless spending and offering misleading financial advice (emphasis added)
I hope that the Lafontant and Taylor cases do lead to reforms of the structured settlement transfer laws, and lead to a licensing standard, where a penalty for non compliance can lead to heavy, publicized fines (just like other financial services regulation) and in the worst, a person's or entity's license to operate can potentially be pulled out from underneath them if they do not comply.
Whether or not the reforms materialize this is the matter of these two men and the countless numbers of other known and unknown victims of similar business conduct. Should these alleged victims prove their cases, they will need to be compensated. Upon information and belief, there may be more victims and more lawsuits are on deck.
CBC Settlement Funding is a member of the National Association of Settlement Purchasers
*Lafontant Defendant Washington Square DBA Imperial Structured Settlements was a member of NASP at the time of the solicitation and sales in Lafontant. Imperial Structured Settlements was later sold to Blackstone Group and operates under the name DRB Capital, as a member of NASP. In 2014, I exposed how both Imperial Structured Settlements and DRB Capital falsely claimed a photo stock image was an actual customer of the company named Kristin.
Taylor Defendants 123 Lump Sum LLC (including Structured Asset Funding and Isettlements) as well as Client First Settlement Funding, listed in the amended complaint as an agent for Defendant Bexhill are members of NASP.
Defendants have denied wrongdoing.