by John Darer CLU ChFC CSSC RSP
Cash now pushers spend huge sums of money on advertising each year. Memorable advertising such as JG Wentworth's tribute to zaftig Viking opera singers serves to increase brand awareness. As obnoxious as it is, and however misleading some of it is, it works. Silly sells! Even if Vikings didn't have horny helmets.
But is it smart to make a purchase decision based on the company advertising?
Consider this story…
I received a call from a "cash now" consumer with buyer's remorse last night, who was having second thoughts and found our web site through a referral.
The consumer was a nice chap who, in my professional opinion, had a legitimate reason transferring certain structured settlement payment rights. The consumer exclusively reached out the two largest advertisers, Peachtree Settlement Funding and JG Wentworth.
Initially, the engaged with JG Wentworth, who, as their reputation suggests, did not provide their most competitive offer. Subsequently, the consumer approached Peachtree, which presented better offer than JG Wentworth. The consumer then returned to JG Wentworth, who countered with an offer that exceeded Peachtree's a few thousand dollars, leading the consumer to believe they had successfully "negotiated" favorable deal. Unfortunately, this assumption was misplaced
We determined that the Peachtree offer was at an effective discount rate of over 22% and that the JG Wentworth counter offer was at a discount rate in excess of 18%. Neither of the offers from big advertisers were anywhere near competitive.
Fortunately for the consumer he still has the option to back out of (or renegotiate) the deal with JG Wentworth since no Court approval has been obtained. Others aren't so lucky. He was referred to sources we know that can offer better discount rates on the deal. Perhaps JG Wentworth will sharpen their pencils. Yet one wonders if the consuemr was not encouraged to shop around, whether the consumer would be just another victim of venditor emptor.
I also asked the consumer if he was aware of or told of any servicing agreement since only a portion of the settlement payments were to be transferred because many annuity issuers will not split payments.
Another quick story…
This morning I received a call from someone from Franklin, TN who was in desperate straits and after getting beaten about by a several factoring companies he stumbled upon this blog for which I might add he expressed his gratitude. The man had received an offer from Client First Funding when another company representative (from a big advertiser) expressed its doubts that Client First would be able to get Court approval to be able to execute because the offer "was too good".
What the heck are we dealing with here anyway?
SHOP AROUND FOLKS, SHOP AROUND. IF YOU WANT A GOOD DEAL, IGNORE THE BIG CASH NOW ADVERTISERS YOU SEE ON TV, NO MATTER HOW AMUSED YOUR ARE WITH THEIR ADVERTISING!
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