by Structured Settlement Watchdog
Poaching of structured settlement annuitants continues to be a highly sensitive issue for some structured settlement factoring companies while proponents say it's needed to make sure annuitants aren't getting ripped off by the structured settlement buyers.
Poaching, in this context, is not about those killing beautiful elephants for their tusks, giraffes or lions and posing with the"trophy", shooting fish in a barrel or clubbing fur seals for their pelts. In it's most constructive, poaching is happening is in response to the figurative equivalent of removing the fins of a fish and throwing them back into the sea. Sometimes one fin is removed at a time, leaving the fish unbalanced. Sometimes it's completely de-finned, leaving it to eventually drown, or be eaten, without the fair chance that nature intended.
An example of financial de-finning is where some factoring companies deliberately advise annuitants to sell the early years of their payments in poorly priced deals, knowing that they are setting the the seller up to fail, while setting up the buyer and investors for a juicy repeat sale.
Structured Settlement "Protection" Act | The Oxymoron Edition
Young Afro American Cedric Martez Thomas, a New York resident, might not have been financially raped by Novation Funding for in excess of $1.45 million in October 2015, in Palm Beach County Florida. Novation filed a transfer petition for the cesspool grade deal in Okeechobee County where there was less comprehensive online access than Palm Beach County, where Novation has its main office. Had Novation's competitors been able to crack the wall around Thomas and inform the then 21 year old Thomas of the obscene amount of profit that Novation and its investors built into that deal, he might not have been financially raped. Instead, in a a case where Structured Settlement Protection Act is an oxymoron, Judge Gary L. Sweet was oblivious to how bad the petition Thomas was and approved the cesspool grade deal without Thomas ever appearing in Court despite the fact he was in Florida on the day of the hearing. Novation's advertising is an ongoing fraud on the basis that it can be proven time and time again that Novation Settlement Solutions does not pay the maximum payouts they advertise.
In the Junior Matos case which I wrote about recently, Novation attempted to conceal the identity of a seller in another case on a Florida application to transfer (one month after the last of 3 failed attempts to do the same in New York) . Fortunately the alert Florida judge refused to go forward without the seller/defendant's name identified. Subsequently a negotiator firm was able to reach the seller and attempt to negotiate a better deal for him, at first with Novation and then when Novation couldn't meet the best number (which would help validate Novation's advertising of maximum payouts instead of underscoring a claim of advertising fraud against Novation), JG Wentworth got the deal in the end. Matos got a lot more money.
The structured settlement secondary market's lack of regulation and accountability in sales and solicitation of annuitants, is the enabling agent of the massive amount of fraud that occurs today and has occurred for years.
Honor Among "Vultures"?
Poaching is certainly an unpleasant by-product for a number of corpulent structured settlement buyers. They all hate it but many of them do it themselves. This video of vultures fighting for food captures the essence of what happens, figuratively speaking.
In an ideal structured settlement factoring world, the first wants the competition to back off when they have a live fish on the hook. Seems reasonable. But if you know an annuitant is getting thoroughly ripped off, is there moral obligation to do something? My source for the Cedric Martez Thomas case was a NASP member who probably could have beaten Novation's cess pool deal (as could two other companies I contacted at the time), BEFORE Judge Sweet approved what amounted to one of the worst financial rapes since the passage of the Structured Settlement Protection Act of 2002.
One industry colleague wrote in March 2018 "we’ll hope for a world where true or near true liquidity (access to fair market value, like what exists in the Real Estate Industry) exists for existing structured settlement recipients".
The litigation arising out of the poaching is a good thing in my opinion because it will offer more opportunities for the mainstream news media and courthouse reporters to report. Legislators need to see what horrible things are happening to what probably should be a protected class of citizens in their states. Will this lead to change? We'll see if the fetid stench eventually gets unbearable and legislators will have to act.