by John Darer CLU ChFC MSSC CeFT RSP CLTC
A notary public is often called upon to witness and notarize signatures on personal injury settlement documents. According to National Notary, a notary public is "an official of integrity appointed by state government —typically by the secretary of state — to serve the public as an impartial witness in performing a variety of official fraud-deterrent acts related to the signing of important documents".
Structured Settlement Factoring Companies Are Using Notaries as a Source of Poaching Leads
One of the tenets of the code of ethics of the American Society of Notaries is "To not use the office of notary public as a means of financial gain, for myself or others, in any other business or profession".
On a recent matter concluded during the Covid-19 pandemic, a mobile notary public was contacted to witness and notarize documents related to a confidential settlement of a personal injury case involving a special needs plaintiff. While at the plaintiff's home to notarize the subject settlement documents,the notary public mentioned that she knew of someone who "could get the client more money" and called a representative of a structured settlement factoring company from another state. It was clear that there was a misunderstanding by the notary that the plaintiff was selling structured settlement payments. But given that the role of a notary is to simply witness and notarize signatures and not solicit business for third parties, it puts the integrity of the notary in question.
The thought that a notary public is initiating and/or facilitating the distribution of confidential information that could jeopardize the confidentiality clause in a settlement agreement that he or she is witnessing and notarizing and violating a tenet of the notary profession, gives me pause for concern and reason to blast this loud warning to trial lawyers, plaintiffs and guardians.
Indeed the issue of integrity of notary publics has been raised by me before in relation to the poaching of structured settlement factoring deals.
Structured Settlement Secondary Market Sleaze | Notary Repeatedly Deceives Clients for Client's Competitor July 20, 2016
Notaries Getting Paid Off by Cash Now Pushers | Is It Ethical or Legal? May 6, 2014
The structured settlement factoring representative referred by the Mobile Notary Public has been doing exactly what factoring companies do, soliciting, calling multiple times a week and emailing the client, using the guise of "help with the details of your annuity" and "annuity protection service". The factoring representative was already told that the payments could not be sold.
When I checked the subject individual did not hold an insurance license the plaintiff's state, was not registered with FINRA, or as an investment adviser with the SEC, according to the IAPD database and had no Linkedin profile. The subject individual had a website registered anonymously that displayed no address. Not exactly something that inspires any confidence.
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