Structured Settlement Income Streams | Campbell's Not "Mmm Mmm Good"

by Structured Settlement Watchdog®

Structured settlement social media road kill from Woodland Park Colorado is the subject of this breakfast post. 

The first red flag regarding the Campbell Financial Corp. website is its statement "No advisor or planning experts required".

You should not go into any structured settlement transaction  ( as a plaintiff, defendant,  adjuster or attorney), sell structured settlement payment rights, or purchase the rights to structured settlement payments in a structured settlement factoring transaction  (as an investor) without proper advice.

A. Campbell Financial Corp.  says "Structured Settlements Are Court Awards of personal injury cases, often from an automobile or other accident".  Campbell Financial Corp. is dead wrong.

Fact   Structured settlements are not Court Awards, they are settlements.  Isn't that why it's called a "settlement" ? A settlement is a compromise, involving the so-called  "meeting of the minds".   If a jury awards Kathy Klutz $100,000 as compensation for the broken hip she sustained "surfing" the hazardous unmarked banana peel in the local El Greasy Spoon and she agrees to accept $85,000 rather than fight El Greasy Spoon's appeal, it's a settlement.

Fact: A Court does not "award personal injury cases". A court awards damages.

Fact: In New York, where there are periodic payment of judgment statutes  (CPLR Articles 50A and 50B) there is a so-called structured judgment. A structured judgment is not a structured settlement.

Fact: Settlements for some types of cases require court approval of the settlement. For example settlements involving minors or incompetents, or where Surrogate or Probate approval is required in a death case.

B. Campbell Financial Corp. says "So, a court of law rules that an award be paid to a plaintiff (injured person in a series of payments

Again, a settlement is a settlement not a court award.

C. Campbell Financial Corp. says " an insurance company must pay the award"

Fact: With the exception of  those states where  direct action is permitted against a defendant's insurer, if there is an award, it is against the Defendant.

Fact: There are many settlement that are paid out a defendant's self insured retention, also known in industry vernacular as an "SIR". A self insured retention is like the deductible you pay on on your health insurance policy or automobile insurance.

Fact: Some Defendants are uninsured or under insured

D. Campbell Financial Corp.states "Contrary to media reports not one life insurance company has ever needed a government bailout or failed to make an income payment, including AIG insurance companies"

Fact: Executive Life Insurance Company of New York  (ELNY) was recently liquidated and 1,500 or so annuitants are enduring shortfalls in their annuity payments, some drastic, as the result of the ELNY restructuring plan. 

Fact: Also affected by the shortfalls were investors who had purchased structured settlement payment rights derived from ELNY funded structured settlements.

E. Campbell Financial Corp. describes an investment in structured settlement payment rights as "This 100% guaranteed Safety Investing™ Product (some are like very high yield CDs)

Fact: An investment in structured settlement payment rights is nothing like investing in a CD.  CDs are bank issued instruments that are FDIC insured, while an investment in structured settlement payment rights is not.

If the ELNY case is instructive, investors may not benefit from statutory protections which may otherwise be available to consumers.

Fact: The regulation of banks and insurance companies is different.  The secondary market for structured settlement payment rights is massively under regulated. Unlike life settlements or viatical settlement, there is no license currently required to broker the purchase or sale of structured settlement payment rights. There is little to no regulation of the manner in which consumers or investors are solicited in the structured settlement secondary market.

F.  Campbell Financial Corp states as reasons to own a structured settlement income stream, among other things: "Income payments are guaranteed by additional insurance, can be safely ignored and safety of being backed and assigned by Court Order"

Question:  What additional insurance?

Fact: Ignorance proved costly for many victims of the ELNY liquidation. 

Fact: The Court Order of transfer can be appealed and vacated. See Brenston case in Illinois where 3 such court orders were vacated  more than two years following the transfer, and a class action against JG Wentworth that followed.

Fact: The Court Order does not guarantee solvency.

The facts about structured settlements cannot safely be ignored. Always seek proper advice from credentialed financial advisors.