by John Darer® CLU ChFC CSSC RSP CLTC
The Baltimore Sun reports that Congressional Democrats led by Rep. Elijah E. Cummings of Maryland's 7th District, are questioning Access Funding, a Bethesda MD company established in December 2012, that offers lump sum payments in exchange for monthly settlement checks awarded to people poisoned by lead paint. Elijah Cummings is the Ranking Member of the Committee on Oversight and Government Reform
"We are investigating the structured settlement purchase industry to examine how companies purchase payment streams from settlement recipients for a lump-sum payment upfront, as well as the adequacy of existing legal protections for settlement recipients," Cummings wrote in the letter, according to the Baltimore Sun report.
Experts have questioned how informed structured settlement sellers are about the transactions they are agreeing to. Sellers of structured settlements are required to receive independent professional advice (structured settlement IPA) before signing an agreement, but in many cases the counseling sessions are perfunctory and are completed in less than a minute. A Maryland attorney Charles E. Smith is currently defending a lawsuit related to at least one of the 52 cases related to purchases of structured settlement by Access Funding.
"I am troubled by these allegations because it appears that American families -- many of whom are African Americans who have been subjected to devastating lead poisoning -- are now being targeted for their financial settlements," Elijah Cummings said in a statement.
"I want to understand not only how this company (Access Funding) has been engaging in these practices, but also whether broader reforms are necessary to protect vulnerable families from dishonest financial predators."
With the business conduct of settlement purchasers now on the radar of the mainstream press, is it only a matter of time before state and federal government legislators and regulators start investigating more settlement purchasers? Some might say "it's about time".
The Baltimore Sun gets it wrong about the title of Michael Borkowski who is the Chief Financial Officer of Access Funding. The Sun erred in stating he was the CEO. The CEO of Access Funding is Lee J. Jundanian