by Structured Settlement Watchdog
Why Use of "Structured Settlement Funding" by Factoring Companies is Inappropriate and Misleading
- Structured Settlements are defined under the Internal Revenue Code at IRC 5891(c)(B)(1).
- Structured Settlements are primarily funded with structured settlement annuities, sometimes with United States Treasury bonds
- A Structured Settlement Transaction logically describes the entire structured settlement process which results in Structured Settlements, as defined at IRC 5891(c)(B)(1).
- The structured settlement process involves the placement of an annuity which is an insurance product requiring a professional license.
- Structured Settlements are almost always funded by the Qualified Assignment Company using money paid as consideration to it by the Defendant or its Insurer. On occasion structured settlements are funded by the Defendant or the Defendant's insurance company as what is known as a "Buy and Hold".
- Patrick Hindert, author of Structured Settlements and Periodic Payment Judgments wrote "Defendants, including casualty insurers, purchase 100 percent of ALL structured settlement FUNDING products" in his analysis of the Victims of Terrorism Tax Relief Act of 2001, enacted on January 23, 2002, the Act that created the definitions about which I am writing.
- A Structured Settlement Factoring Transaction is defined under the Internal Revenue Code at IRC 5891(c)(B)(3).
- Gaps in current state regulations enable companies engaging in a Structured Settlement Factoring Transaction to operate WITHOUT a professional license.
- A Structured Settlement Factoring Transaction IS NOT a Structured Settlement Transaction. If it were, there would be no need for the separate definitions. Clearly Congress understood the distinction when the Act was passed that created IRC 5891. Why can't the factoring companies listed below?
- Some companies who handle structured settlement factoring transactions are incorrectly using the term "structured settlement funding". They are NOT funding structured settlements they are funding structured settlement factoring transactions. None of these companies are qualified assignment companies. Some of these companies are listed below:
Easylawsuitfunding
Federal Settlement Group (JG Wentworth alter ego)
Oasis Legal
American Settlement Fund ( JG Wentworth Alter Ego)
Fsgerard
Heart of America
Condor International
Lawsuit Financial
- Due to the spectacularly inappropriate and misleading use of the term "structured settlement funding" (and other insurance or investment terms) there is resulting confusion among consumers in Internet searches who end up calling the factoring companies for structured settlement information that many may not be professionally qualified to give. From experience I can tell you that misinformation by certain factoring companies also serves to confuse some members of the judiciary.
- With more and more people using the Internet for information each day it's vital that something is done about these misinformers.
- Does the inappropriate use of terms reach the level of disinformation?
This information should be of interest to consumers, plaintiff attorneys,The Federal Trade Commission (FTC) , The Federal Communications Commission (FCC), The Departments of Consumer Affairs in All 50 states of the United States, Associations of Judges and Attorneys General.
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