by Structured Settlement Watchdog
If you receive an unsolicited email or a phone call from a trusted settlement planner to sell the structured settlement that they sold you, you should immediately become suspect.
There are legitimate reasons to question the settlement planner's motivation no matter how trustworthy the settlement planner may be to you.
- Selling your structured settlement payments is a guaranteed money loser. The most that any seller can receive is pennies on the dollar no matter who you go to. If you are solicited by the settlement planner that placed the structured settlement for you or your client, "pennies on the dollar" is the best they can do.
- On large structured settlements, you could be shafted for hundred of thousands, or like New York resident Cedric Thomas was, for in excess of $1 million. Thomas was shafted for over $1.4 million by a South Florida company. Let that sink in. We estimated that there was around $1.4 million in that deal in profits for the buyers and investors in the shafting. At the time the deal was consummated in October 2015, we asked 3 companies to share with us what they would offer on the same deal. Multiple companies we canvassed at the time said they would have offered $2.5 million, compared to the little under $1.1 million that Thomas received.
- Always ask and get in writing how much the settlement planner, directly or indirectly would make on the deal to buy your structured settlement payments. Look how juicy the profits were in the Thomas case. If you are being solicited by the settlement planner to sell your rights to a big structured settlement and they won't be transparent in writing, then you may wish to question doing the deal. It is your business because rates are not regulated and everything is negotiable to an educated seller.
- If the proposed deal is being handled by a third party, then be sure to get in writing that the amount of any payment that has been negotiated between your settlement planner and the third party. Once again, if settlement planner will not be transparent about the fees in writing then it may make sense to avoid the proposed deal.
- Some settlement planners are offering investment advisory services. If the settlement planner has solicited the sale of your structured settlement payments for pennies on the dollar, piggy-backed with an investment of the structure proceeds with a firm owned or controlled by the settlement planner, or where the settlement planner directly or indirectly receives a share of asset management fees only years after writing a big structured settlement in which he/she/it made a huge commission, seems like an obvious conflict of interest.
- Be mindful where you are signing or have signed a contract giving the settlement planner discretion over an investment account.
How can personal injury lawyers protect their clients? Trust, But Verify
Personal injury lawyers working with settlement planners, should consider insisting that the following be a condition of working with clients of their firm. It is taken from the required Structure Broker's Affidavit required by Bronx County Supreme Court in New York
"Neither I, nor my firm, will:
(a) provide any information about this settlement to any factoring company for any
(b) solicit the plaintiffs or plaintiffs’ family on behalf of any factoring company for
any purpose, including, but not limited to, the proposed sale of plaintiff’s future
periodic payment rights, nor will either of us or our companies’ participate, assist,
promote, or aid in such solicitation by any person, firm, corporation or entity; or
(c) seek or accept any consideration financial or otherwise, directly or indirectly from
a factoring company with respect to the proposed structured settlement".
My firm includes this language in affidavits or declarations submitted in support of petitions for approval of minors' settlements, infant compromises and petitions to Surrogate and Probate courts.