by Structured Settlement Watchdog
Is it a bad thing that the National Structured Settlement Trade Association (NSSTA) has no companies or individuals that are buyers of structured settlement payment receivables in its organization?
** Why should they? The NSSTA, whose members are on the "creation" side of the structured settlement business, should be applauded for excluding companies on the "destruction" side of structured settlements. It is sticking to its mission statement. Factoring companies have their own trade association in the National Association of Settlement Purchasers ("NASP"), .
On his "Beyond Structured Settlements" blog, knowledge management guru Patrick Hindert appears to applaud the Society of Settlement Planners, at the expense of NSSTA, for including factoring companies as members, as if they are more open-minded and in tune with today's new reality.
A former member of that organization, I resigned in September 2005 over the issue of factoring company involvement in the organization. In my opinion their inclusion as members was, and still is, an absolute disgrace. The motivation for the factoring company membership was financial and I wanted no part of it. At the time, board members of the Society of Settlement Planners tried to justify factoring company inclusion by saying that "factoring is part of settlement planning". I was looked at as bit of a pariah for even questioning it. Some of them might even still believe that "factoring is part of settlement planning". One factoring company was let in and then others lined up proposed by other members. For a factoring company it's a great strategy…. how can you lose by being the wolf in the hen house?
Poorly drafted bylaws prevented the exclusion of factoring companies and in the end the Society of Settlement Planners took the factoring company money. At the March 2005 annual meeting of the Society of Settlement Planners in Washington DC attendees were confronted by factoring company reps at virtually every turn. One rep allegedly asked the head of a major structured settlement brokerage to go through his files to see which ones were candidates for a factoring company approach. Fortunately the head of the brokerage rebuffed him. Factoring companies are offering brokers (and even some attorneys) a finder's fee as an incentive for referrals and some structured settlement brokers and settlement planners are biting. Is yours?
Why should we add credibility to companies whose business practices on the Internet have led to confusion among consumers? Shouldn't they make changes to those business practices before they are let in?
Factoring companies want to be part of NSSTA and SSP to enhance their credibility. I can see what we add to them but I'm having a hard time seeing what they add to an organization of structured settlement brokers and/or settlement planners other than creating a huge potential conflict of interest for participating structured settlement brokers and settlement planners that will make Macomber look like a pin prick. How can an expert hired by the plaintiff or plaintiff's attorney run around in good conscience, justifying their existence by waving the banners of Macomber, Lyons and Hartford litigation at plaintiff attorneys when they are engaging in structured settlement factoring transactions for profit?
In my opinion, which I'm confident is shared by many, factoring companies have no legitimate place in and should not be considered part of the structured settlement industry or the settlement planning industry.
- They are part of the factoring industry.
- They are vendors who provide a service (buying structured settlement receivables in exchange for a discounted lump sum of cash) to those that are in desperate need of cash.
- As has been stated numerous times on this blog there are only two factoring company reps that have earned the designation of Certified Structured Settlement Consultant and of those only one has actually practiced as a structured settlement broker prior to entering the factoring business full time.
Mr. Hindert's point of view might be somewhat biased
From what I've heard his firm , S2KM, counts a major factoring company as one of its clients.
**for the purposes of this article we are not counting Symetra Life insurance Company, a member of the NSSTA, which owns Clearscape Funding Corporation. The opinion of this author on that subject is well documented in "Boo Symetra and Boo Hoo Too!" written earlier this month.
Leave a Reply