Annuity Transfers, Ltd. pays brokers for referring it structured settlement factoring business. According to its website one of the options Annuity Transfers offers is for the money to be "wholesaled" to the broker or then charges the tort victim (structured settlement annuitant) what ever they want. Annuity Transfers, Ltd even provides a helpful example:
"Coordinate the customer relationship directly:
Manage your own seller, price the transaction to the seller, and enjoy a full commission based on the difference between our price to you and the actual seller price. All structured settlement (factoring) transactions feature very unique circumstances, but a routine transaction might look like the following:
Present Value of
payments at 14% = $50,000
Present Value of
payments at 16% = $45,000
Difference
(Your commission) = $5,000 (minus the original $200 – see Double Payment Program! )
Remember, you negotiate the deal with your client and determine that they want to sell all or a portion of their payments."
Tort victims, structured settlement annuitants and their attorneys should be aware of the potential mark up that they are exposed to. In the end does the broker disclose his/her commission at the time of the pricing discussion with the client? Does the tort victim ever know that they have the ability to negotiate the fee?
One of the issues involving those structured settlement brokers or settlement planners who participate in structured settlement factoring vig taking is such a disclosure. Those who say they are looking out for the tort victim to gain their trust yet do not disclose the effect on the pricing at best bring their ethics into question.
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