by Strutured Settlement Watchdog
The Annuity.org propensity to post wretched, easily discredited misinformation about factored structured settlement payments,
The Annuity.org propensity to post wretched, easily discredited misinformation about factored structured settlement payments, despite editorial reviews and financial reviewers and its phlegmatic approach to correct inaccuracy, makes them a poor, unreliable source of information about structured settlements. I continue to ask, why?
Let's get started with the latest episode of "What's Wrong Wit Dat?"
Kicking off today's episode, one wonders how Annuity.org claims to have 15+ "Certified Financial Reviewers", yet missed the momentous news that New Hampshire Structured Settlement Protection Act, passed August 11, 2021, making it 50 States and District of Columbia that had Structured Settlement Protection Acts. The historic news was reported by Faegre Drinker Biddle & Reath's Nicole J. Wixted and Sandra K. Jones, on August 12, 2021. Yet 13 months later, on September 7, 2022, Annuity.org's staff writer, her editor and highly credentialed Financial Reviewer" missed the achievement, 20 years in the making, stating only 49 States and District of Columbia has SSPAs. The Annuity.org staff writer who has previously cited from the NSSTA, the structured settlement industry's largest and oldest trade association, would've also been able to learn the news of the historic achievement from NSSTA's website. And now folks, if this were a latter day circus, here's where the bears ride out on their unicycles,
the National Association of Settlement Purchasers (NASP) of which Annuity.org "partners" CBC Settlement Funding and Fortune Settlements are members, noted the historic achievement on October 4, 2021 NASP applauds New Hampshire's passage of a Structured Settlement Protection Act; SSPAs now in all fifty states.
How can Annuity.org, a "partner" to two factoring companies bollox this thing up so bad?
"A secondary market annuity, or SMA, refers to a transaction in which the owner of an annuity, a structured settlement or lottery winnings chooses to sell his or her payments to a factoring company for an immediate lump-sum payout, often, at a discounted rate", says Alanna Ritchie.
What's Wrong Wit Dat?
- What is being sold to investors is structured settlement payment rights, not an annuity and not a transaction.
- At least when it comes to structured settlements, which are by far the majority of structured settlement factoring transactions, there is no annuity being sold since the annuity is owned by a qualified assignment company NOT the Payee who is doing business with "Pennies on the Dollar LLC". Any other representation is simply not accurate.
- Ritchie compounds the inaccuracy by citing an incccurate source called "The Women's Business Center".
How the Women's Business Center Gets Secondary Market Annuities and Structured Settlements Inaccurate?
1. They say "While it's common for inherited annuities to end up being sold in the secondary market, it's even more common for annuities that were awarded or won as structured settlements to find their way there".
What's Wrong Wit Dat?
Structured settlements are not awarded. A settlement is not an award. That's why it's called a settlement. A structured settlement is an arrangement, the result of a negotiated compromise. An award is not a compromise. A judge,arbitrator, or jury makes an award in a legal case. In some cases in life a committee makes an award (e.g. best essay, best holiday decorations, best movie, best song)
2. Ritchie says that "A structured settlement is an annuity that is awarded to a plaintiff by the court as part of a judgment. It's called a structured settlement because the money that is awarded is not given as a lump-sum payment. Rather, payments are made over a series of months or years. They can even be made for life. Structured settlements are also used when lottery players win cash for life". Source: Annuity.org 12/2/2022
What's Wrong Wit Dat?
- A structured settlement is not an annuity. A structured settlement is a form of settlement that may be funded with an annuity. A definition of the term "structured settlement" can be found in Internal Revenue at IRC 5891(c)(1). For more detail about the question What is a Structured Settlement, please visit 4structures.com, What is a Structured Settlement? Structured Settlements Expert (4structures.com)
- A structured settlement is not a judgment either. Under New York CPLR Articles 50A and 50B, litigation may conclude with a structured judgment. A portion of the future damages in such cases may be paid in the form of periodic payments that are funded with an annuity in acordance with the relevant statute.
- A lottery is not a structured settlement, period. You buy a ticket, you dream a little and, may be you win. However, the state lottery or sweeptakes sponsor of the prize (e.g. Publisher's Clearing House) may choose to purchase an annuity to fund the obligation to pay the winner)
3. "The majority of secondary market annuities come from structured settlements. In most cases, people who own the annuities either don't want to wait for the smaller payments each month, or, they need a larger amount of money. This is most often true with medical malpractice and personal injury cases. Medical bills, insurance payments and other bills that may not have been paid, now need to be. The owner of the structured settlement can sell the payments on the open market and be able to take the entire amount of cash". Source: Annuity.org 12/2/2022
What's Wrong Wit Dat?
- The imposter that Ritchie and others call a "secondary market annuity" is not an annuity at all. All the Search Engine Optimization in the world does not make structured settlement receivables an annuity. But they keep trying.
- Structured settlement annuities not owned by the payees, they are owned by assignment companies. In rare cases they are owned by Defendants or their insurers. As we've discussed, what is sold to investors is structured settlement payment rights not an annuity.
"Within only a few decades of its creation, the secondary annuity market developed into a large, competitive and regulated industry. The market developed when laws were enacted permitting annuity owners the option to receive a portion or all of their earnings immediately rather than waiting months or years for a full disbursement"
What's Wrong Wit Dat?
Unfortunately there is a continuing legacy of abusive sales practices in the structured settlement secondary market that Annuity.org chooses to selectively ignore with their statement. The secondary annuity market is horribly under regulated and until recent years, there have been little to no consequences to bad actors.
How many other financial services segments have virtually no regulation of sales practices of its individual participants and companies? It took a blistering expose in the Washington Post to expose the Access Funding scam of Baltimore lead paint victims with structured settlements that led to fast track of reforms in Maryland. It took 7 years, but Raffi Boghosian an officer of the now defunct company and its successor Reliance Funding, was recently convicted in an action brought by the Maryland Attorney General. See Boghosian convicted.
There is a long way to go but progress is being made.
Annuity.org serves a sliver of the structured settlement factoring industry. My interest is in the greater universe of people seeking information about structured settlements. The public deserves accurate information about structured settlements in my opinion and it is part of my misison to help them. Annuity.org has been at this for 9 years. Annuity,org claims that its mission "is to educate people about their financial options and empower them to make informed decisions based on their unique needs".
Read about my Structured Settlement Watchdog pro bono work
Last updated December 31, 2022
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