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Plaintiff Only Structured Settlement | "You Would Never Use Defense Experts"

by John Darer® CLU ChFC MSSC CeFT RSP CLTC

A well respected New York City plaintiff medical malpractice and personal injury lawyer related to me in a discussion about his client's economic damages, that he had the "expert that the defense likes to use" for his economic report. While cynics might expect a plaintiff attorney to "puff up the numbers" to help net a better result, this highly qualified New York City attorney opined that his choice of expert could in fact be more more credible when discussing settlement. 

Yet some of my industry colleagues take out ads, or exhibit at trial lawyer association meetings with huge banners, which make an incorrect assumption

"You would never use defense experts...", or  " Still using your adversary's structured settlement expert?" a plaintiff attempt at appealing to logic.

Is it time for those concerned to dispense with the outdated and at times irrelevant marketing strategy implied by the title to this post?  For sure there is justification for settlement experts on both sides, but I submit that credentials and experience are far more important barometers of competency.

 

Last updated May 15, 2021

Annuity.Org "Funeral Crashers" Lower Structured Settlement Cash Now Bar

by Structured Settlement Watchdog®

Annuity.org, Ronnie Zelek's lead generation website for at least one of the members of the National Association of Settlement Purchasers, is now soliciting structured settlement annuitants on funeral websites. Just mortifying!  Notable "funeral crasher" Chazz Reinhold would be proud. In the 2005 movie, The Wedding Crashers, Chazz, played with aplomb by Will Ferrell (below), crashes funerals to pick up women, taking advantage of them at a vulnerable time. 

 
MOM, THE MEATLOAF!  

Annuity .org seems to have latched on to the Chazz Reinhold axiom that "Grief is nature's most powerful aphrodisiac".

"Grow Your Dirty Money" by Selling Your Structured Settlement? AAN LOL

by Structured Settlement Watchdog®

The Annuity Action Network call to action displays consecutively larger piles of dirty money.  That's right, piles of quarters or silver dollars with dirt sprinkled on top, like sugar, festooned with the roots of a lonely bud perched atop the dirt.

Who thinks "dirty money" is going to motivate people to sell their structured settlement?   Who writes these ads?  Social Media Road Kill of the highest grade.  This "bud's" for you.

How solid are the roots of your "budding finances" after selling your structured settlement for pennies on the dollar in a smidgen of ash from your incinerated structured settlement payments? 

Last time I saw stack of "silver dollars" that short, they had syrup on them. How solid is a stack of coins?  About as solid as a stack of poker chips.  Listen bud, you can easily knock over a stack of poker chips or coins, but to stop a river (of income) you need to build a dam.  And you need to be pretty "damn a-gnawing" to do that.

The Annuity Action Network is registered anonymously, "nobody needs to know the dirt", eh?   [We figured out which cash now pusher benefits from Annuity Action Network back in August, see this prior post]

 

"Love that 'Dirty Money'...Cash Now is My Home"

I'm wanna tell you a story
I'm wanna tell you about cash now
I'm gonna tell you a big fat story, baby
Aww, it's all about cash now

Yeah, down by ole Sumter
Down by the county of Prince George
Aw, that's what's happenin' baby
That's where you'll find me
Along with lovers, buggers and thieves
Aw, but they're cool people

Well I love that dirty money
Oh, cash now you're my home
Oh, you're the number one place..

(parody of Love That Dirty Water by Ed Cobb, a 1966 hit by The Standells)

 

 

 

*screenshot of Annuity Action Network ad as it appeared on September 28, 2015 at 12pm EDT

Is this Abusive Structured Settlement Advertising?

by Structured Settlement Watchdog®

What is up with the advertising message of Novation Settlement Solutions?  The reward for selling more of your structured settlement for pennies on the dollar is a sexy pair of sandy legs on a sunny beach with a cool drink at hand and the ocean steps away?   The  irony of the ad is that the drink doesn't appear to brandish an umbrella,  the perfect unwitting metaphor for what financial exposure someone gets who sells their structured settlement payments rights again and again, a loss of protection [for an example see what 11 sales in 2 years will get you by reading Taylor v 123 Lump Sum]. It's a wolf in a 36 inch inseam. 

Sell your structured settlement payments again and again and you too can end up on the beach?   

Total Rubbish!

Members of the structured settlement secondary market continue to make themselves less and less credible when they display grossly misleading advertising messages like Novation Settlement Solutions does in this instance.

What's next, trying to motivate an Eskimo into selling more structured settlement payments with a frosty picture of "Miss Ninavut" next to a glacier?  Now that's really "Ick-gloo"

In my opinion, this sort of advertising needs to be banned when regulation of structured settlements secondary market is eventually put in place. 

 

The Old "Chicago Bank Roll" and a Waddling "Ben Dover George"

by Structured Settlement Watchdog

Stone Street Capital might not think so, but I think I'm doing them a favor. I showed their tweet that I reported on yesterday, to random passenger on an Amtrak train on which I am riding. I asked him to give his first impression of the $100 bill over a wad of $1 bills which Stone Street used to promote itself yesterday.

First words " a bunch of crooks" "That's like the old Chicago Roll"

Not familiar with the term I found this explanation in the Urban Dictionary:

Chicago Bank Roll

A roll of money, consisting entirely of singles, with the exception of a twenty wrapped around the outside.

I thought he gave me the whole amount, turns out it was a Chicago bank roll.

Stone Street's tweet featured a $100 over $1, and a it was a wad not a roll and thus could be appropriately classified as a waddling "Ben Dover George".

Now, I'm not saying that Stone Street Capital are a bunch of crooks, far from it,  but another social media gaffe on choice of images is being called into question.

Several months ago I took the mickey out due to a Stone Street ad which appeared to show a man being bitten in half by crocodile, which unwittingly played into the irony of the discount taken by structured settlement buyers and more recently with a tweet featuring a quote from a movie with the title "Taken".

JGWPT Deploys "Good Cop/Bad Cop" Ad Strategy| Will Consumers Buy It?

by Structured Settlement Watchdog ®

Peachtree Financial Solutions "is taking a distinctly quieter approach" based on customer service to reach its target audience" in contrast to its "sibling" JG Wentworth.  It's a classic "good cop bad cop" play by the Radnor PA company,  pitting " See what you can do" against and, according to Grace Chung of Advertising Age,  "in stark contrast" to  " It's my money and I want it now".  { Ad Age  August 15, 2014 issue]?

Both Peachtree Financial Solutions and JG Wentworth  "profit from providing a lump sum of cash to folks in need of immediate capital by purchasing their future streams of (structured settlement) payments (whether partly or in full) for less than the negotiated sum of its current market value".

Sean Reilly Senior VP and Chief Marketing Officer of JGWPT Holdings,  was quoted as saying "A big part of that change is because we have to expand the consideration for the universe of custiomers that have thes estructured settlements but, for whatever reason, have never considered selling. The goal is to show them there's  a viable financial alternative".

There is nothing unusual about a company having different brands  (think hotels  e.g. Ritz Carlton, Marriott, Courtyard, Residence Inn),  but in a structured settlement context such contrast is manufactured by advertising and thus should not relieve  a consumer from the need to shop around.

 We have received anectodes of consumers who have first gone to JG Wentworth being referred to Peachtree for a competing quote.  Don't the profits flow to  the same place?

A pending lawsuit in Connecticut federal court against  JGWPT competitor Structured Settlement Quotes (SSQ), Genex Capital and Genex Strategies,Inc., alleges that"SSQ is nothing more than a fraudulent and deceptive scheme designed to mislead and deceive consumers and benefit certain companies and persons, and in particular Genex  Capital and persons and companies affiliated with Genex Capital"  AND

"While SSQ purports to be a neutral market place, SSQ misleads unsuspecting consumers and steers them to Genex Capital and other related entities and away from competitors".

SSQ claims to "having served over 11,000 customers and transacted more than $500 million in payments since 2007, and counting"

Sources: Woodbridge Structured Funding, LLC v Structured Settlement Quotes, Genex Capital and Genex Strategies, Inc., filed in the United States District Court for the District of Connecticut  (Civil Action 3:14: CV-00214) and SSQ website.

The key takeaway is that settlement purchasers "profit from providing a lump sum of cash to folks in need of immediate capital by purchasing their future streams of (structured settlement) payments (whether partly or in full) for less than the negotiated sum of its current market value".  Start with that premise as you shop for solutions!

The other takeaway for members of Congress and state legislators is that settlement purchasers appear to increasingly fancy themselves as financial advisors. Yet to date there is no licensure, no oversight of such companies' and their competitors' sales practices and no enforceable rules as there are in other sectors within the financial services industry   [ banking, insurance, securities, real estate and life settlements].

Prohibition of Advertising Statutory Protection Under Insurance Law

by Structured Settlement Watchdog™

These are questions that I plan on asking the New Hampshire Insurance Department and eventually every other state insurance department to get some clarity over some important things regarding what is permissible under the law as it pertains to structured settlement annuities..

1. Is it permissible for a life insurance producer with an active license and active appointments with life insurers in your state to solicit consumers or investors to buy an annuity or annuities and state that these annuities "may be partially guaranteed by State Guaranty Associations but we make no representations or warranties in this regard?".

2. Is it permissible under the insurance law in your state to use the term"annuity" or"annuities,"structured settlement annuity"or"structured settlement annuities" to describe structured settlement payment rights in the process of selling structured settlement payment rights to consumers in your state?

3. Is it permissible under the insurance law in your state to use the term"annuity" or"annuities,"structured settlement annuity"or"structured settlement annuities" to describe a product, structured settlement payment rights, in the process of selling structured settlement payment rights to consumers in your state, while stating with respect to such structured settlement payment rights that are labeled "structured settlement annuities"by them that these annuities "may be partially guaranteed by State Guaranty Associations but we make no representations or warranties in this regard?"

Stephen Mathieu and Jean Essinger of Legacy Financial Solutions Inc. of Manchester, NH,must know something that I don't know about New Hampshire Insurance Law Section 408-B:19 which reads:

Advertising Prohibition Policy

Section 408-B:19 “Prohibited Advertisement of Insurance Guaranty Association Act in Insurance Sales; Notice to Policyholders” (I) No person, including an insurer, agent or affiliate of an insurer shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement, written or oral, which uses the existence of the insurance guaranty association of this state for the purpose of sales, solicitation or inducement to purchase any form of insurance covered by the New Hampshire life and health insurance guaranty association act. Provided, however, that this paragraph shall not apply to the New Hampshire life and health insurance guaranty association or any other entity which does not sell or solicit insurance. The use of the protection afforded by this chapter, other than as provided by this paragraph, by any person in the sale, marketing, or advertising of insurance constitutes unfair competition and unfair practices under the New Hampshire unfair trade practices act, and is subject to sanctions imposed in that chapter.        

Legacy Financial Solutions Inc. of Manchester, NH, is listed as active  life producer in public records of the New Hampshire Insurance Department, including appointments with Pacific Life Insurance Company, American General Life Insurance Company and Metropolitan Life Insurance Company three companies that issue  structured settlement annuities (although it is not clear that Legacy is appointed to sell structured settlement annuities by these companies). Legacy adverstisesthat it does  Insurance Brokerage Long-Term Care Insurance,  Life Insurance, Annuities, Disability Insurance Medicare Supplement Insurance, Short-term Major Medical Insurance. Legacy derives compensation as follows  "After the initial free hour of consultation, by mutual agreement, we may be compensated by financial planning fees, advisory fees, product commissions or a combination of these".

In discussing the risks of what Legacy Financial Solutions labels "Structured Settlement Annuities", Legacy states on its website at time of this posting:

"The Annuities are not deposits and are not insured by the Federal Deposit Insurance Corporation (FDIC) or any other federal government agency. They may be partially guaranteed by State Guaranty Associations but we make no representations or warranties in this regard". [emphasis added for the subject matter of this post only]

An opinion letter sought by this author from the New York state insurance department on October 28, 2008,  opined that the use of even a generic brochure about the subject published by the NSSTA in response to the 2008 financial crisis was impermissible when used  by licensed producers. Download Opinion About Use of LIGCNY in Solicitation of Structured Settlement Annuities 1-26-2009

It is important for confidence in the marketplace that insurance laws are clear and that they are enforced.

In general...

Insurance regulators and state legislators must get their arms around the following:

Individuals and entities holding insurance licenses and selling annuities are using the above insurance terms  ["annuity" or"annuities,"structured settlement annuity"or"structured settlement annuities"] to (1) characterize for the purpose of solicitation to consumers , (2) make a market and (3) broker structured settlement payment rights,which are not an insurance product, and imply or infer statutory protections where there maybe none, possibly in violation of state statutes.

Note that there are also folks who are unlicensed who are hocking structured settlement payment rights as "annuities" and claiming the same statutory protection.

There needs to be a clear statement about whether or not such practices are permissible.

Insurance companies must get their arms around the following:

Individuals and entities holding insurance licenses and selling annuities and appointed by annuity issuers that sell structured settlement annuities  are using the above insurance terms  ["annuity" or"annuities,"structured settlement annuity"or"structured settlement annuities"] to (1) characterize for the purpose of solicitation to consumers , (2) make a market and (3) broker structured settlement payment rights, which are not an insurance product, and imply or infer statutory protections where there may be none, possibly in violation of state statutes AND to compete with products the insurer sells.

 

 

 

SellStructuredAnnuity.Com | Just Another Anonymous Cash Now Pusher| Next Please!

by Structured Settlement Watchdog

Cash now pusher SellYourStructuredAnnuity.com is yet another cash now lead generation website with many of the tell tale signs of bogus (1) an anonymous domain name registration (2) no address listed on its website, (3) a telephone number that is not easily traceable (voice mail answers "Rick" ) and displaying an accredited Better Business Bureau seal that does not click through.

The latter is especially worrisome because consumers cannot check out the company in advance. Consumers cannot see if the company, is even a real company, whether or not it has any complaints, who runs it, its legal address,  or even what state it is based in.

Despite all of this, SellYourStructuredAnnuity.com claims that it has a "long history of unmatched customer service". Exactly how can a consumer easily verify this (at the first encounter with the company website)?

The Structured Settlement Watchdog™ recommends that consumers avoid doing business with companies that cannot be straight forward about who they are/                                                                                                  

Avoid becoming shark food. Work with companies that respect "the seal"

                                                                                                                       

Image source: Wikipedia

Paid Links Corrupting Structured Settlement Information Flow for Primary and Secondary Market

by Structured Settlement Watchdog®

Writing comes naturally to some people.  Others know their limits. They believe that they not capable of delivering consistently relevant content for their websites and marketing materials, even in their own industry or specialty.  For others, writing is simply a time consuming waste of time that can be delegated to someone else.

There are plenty of companies out there that charge about $10-$15 per relevant link with claims to build up your online reputation. and hopefully, generate more business. Additional charges may apply for other social bookmarking submissions, paid blog posts, article submissions or so-called  "do follow" social book marking (which has been reported to have greater value).

But what of the quality of the content? It seems like there is a new factoring company website going up every week with "testimonials". Companies that nobody has ever even heard of post "testimonials" from supposed customers. Many of them say the same thing. Some of the websites are still bogarting the same opening line about the 2001 "structured settlements market" from a paragraph in a decade old edition of a text book co-authored by Patrick Hindert.

The quality of the paid content is often so poor, in my professional opinion as a structured settlement subject matter expert,  because at $10 or so per item, what level of bona fides can you expect?   I submit that a use of such paid content services is a short term fix that can undermine a company's online credibility very quickly if the "fluff" is not monitored.  For example, see this March 26, 2008 post "Organic Lab Rat" from Malaysia Now Shilling for.... Note that the links to the factoring company are still live more than 4 years later.

Here is an excellent article on the subject by Josh Davis on LL Social Media, that apparently even had Matt Cutts at Google taking notice.

Search Secrets: How a prominent SEO company is covertly purchasing backlinks for Dun & Bradstreet Credibility Corporation  published May 21, 2012 

If you are an expert, there is nothing better than sharing what you know with your readers. There are structured settlement factoring companies that are making an effort and it shows in the writing and publishing informative quality and relevant content. We will be highlighting some of those in coming posts.

Related Reading About The Google Penguin Update

• 3 Hard Lessons To Learn From Penguin: Be Relevant, Be Balanced, Keep It Real  May 27, 2012
• Google got Trolled in The Wall Street Journal and Decided to fight Back  June 8, 2012
  
  

Secondary Market for Structured Settlement Payments: Labeling is Questioned

by John Darer® CLU ChFC MSSC CeFT RSP CLTC

 

Consumers may not understand that they get one set of protections when buying a fixed annuity or receiving an annuity funded structured settlement (which generally is a fixed annuity) a different set of protections when buying a variable annuity (or receiving payments from a variable structured annuity such as MetLife's Settlement Plus) ,  a disputed set of protections  in the battle field of the indexed annuity and even more unclear protections when buying structured settlement payment rights (a/k/a recycled structured annuities, in-force structured annuities and other trade names)

Like Charles Darwin's finches (right), the first three annuity types come from "a common ancestor"; however, there is no uniform set of rules on suitability standards, supervision and training of salespeople, disclosures or advertising even though consumers often buy all three types of annuities for the same reasons. Consequently, the level of disclosure and protection investors receive varies depending on which agency regulates the version of the product they're buying.

A strong argument can be made that the use of the term "recycled annuities" or any term implying that when you buy a stream of structured settlement payment rights from another annuitant who is selling, or being assigned the rights from someone else's prior purchase, you are "buying an annuity" (in the commercial regulated sense that the word "annuity" is often used by purveyors), is a bit of a canard. It cannot be taken literally, only figuratively.   But the way some advertise may give off the false impression that what is being sold is an off the shelf branded name annuity product from the likes of MetLIfe, New York Life and others.

           

If you were actually buying a regular annuity the transaction would work something like this:

1. A insurance agent licensed to do business in your state who is also an appointed agent the life insurance company issuing the annuity, would take your application
2. You would sign the application.
3. You would give the insurance agent a check made payable to the life insurance company that issues the annuity.
4. A short time later (say 30 days) you would receive an annuity contract with your name on it. You would have a certain number of days to look over the contract, mull over your purchase and give it back to the company for a full refund of the money you invested ("free look period")

Notwithstanding the above four points, if the buyer of an annuity is a senior, or if a variable annuity sale is taking place there are strict rules for the manner of solicitation and determination of suitability. Insurers, which are for the most part huge financial institutions, have a supervisory responsibility over their agents in this regard. With variable annuity sales, there are both insurance regulations and securities regulation that must be addressed with EVERY sale.

How does the typical purchase of structured settlement payment rights by an investor differ from an annuity purchase? If you buy structured settlement payment rights the transaction would typically work something like this:

1. You know a broker or intermediary, who finds cash flows for you, or you observe a cash flow that you like from a chart circulated by a broker of structured settlement payment rights or through an on-line auction.
2. You fill out a reservation form and return it with 10% of the estimated cost of purchase.
3. You sign a purchase agreement
4. From 30-90 days pass, during which time it must be determined, among other things, that the payments have not been previously sold, that there are no child support payments, tax liens, or other liens against the payments., the deal must be reviewed by a judge as being in the selling annuitant's best interest or that of their dependents,
5. The buyer must wire the remaining cash to pay for the purchase
6. The buyer must make sure, among other things that the annuity issuer of the transferred payment rights records the buyer's name in its records.
7. A closing book that is 2-3 times as thick as an annuity contract is given to the buyer. There is just no way to sugarcoat this. For some it will be as confusing as sh*t. One vendor has interposed a trust to purchase and hold the payment rights for the trust beneficiary. Whether through a trust or bought individually, the buyer does not get the underlying annuity contract. 
   

THE BIGGEST POTENTIAL PROBLEM FOR BUYERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. Uncertainty about statutory protection. While the fat lady has not yet started to sing, one should watch very carefully to see how structured settlement purchasers of Executive Life of New York structured settlement payment rights are eventually treated. Do the "buyer structured settlement payment recipients" enjoy the same statutory protections that the regular structured settlement recipients" (i.e. Former plaintiffs) do?  While this may not be a concern to risk tolerant investors, this raises valid questions about the suitability as investment for certain types of tort victims.  I am also not aware of Professional Errors and Omissions liability insurance coverage that covers insolvencies.

 

The market for structured settlement payment rights is under-regulated. There are no mandatory disclosures governing solicitation, no rules concerning solicitation of seniors, cripples, soldiers, veterans, widowers, quadriplegics, day laborers, the mentally insane, or the average Joe

There is clearly a difference between buying an "annuity" and buying a "structured settlement payment right" as an investor. Those who currently advertise these structured settlement payment rights as "annuities" should consider making it more clear in their advertising what it is they are really selling, 

I've heard some rumbling that some life insurers issuing structured settlement annuities who see their brands being indiscriminately associated with unregulated derivative products are considering action that might result in some loss of appointments.

Last updated December 14, 2021