The Florida company which highlights a picture of a goofy woman with a fanned out wad of $1 bills now has high dollar value giveaways to "lucky" people who allow it to buy their periodic payments at a discount. Lovely!
Peachtree Settlement Funding, one of the factoring companies that the Society of Settlement Planners, Inc. accepted money from, recently gave away two plasma TVs according to a recent story printed on Business Wire. The publishing of the story suggests that the Peachtree plasma giveway is part of an ongoing "rewards program" that Peachtree uses to induce potential customers to sell their structured settlement payments. What Peachtree does is induce the sale of rights to an insurance product. Yet it is generally illegal for licensed brokers/sellers of a structured settlement annuity (insurance product) to do give such an inducement.
To those receiving periodic payments, Peachtree states that "inflation is like a cancer eating away at the value of your money". Following that analogy you might say that the effect on your long term security from selling the rights to your structured settlement periodic payments is like accelerating the tumor.
The anti rebating laws on the books in most states prohibit insurance agents from paying cash or value inducements to customers for their insurance business, which includes annuities. As indicated above, this includes the creation side or setting up of structured settlements. Federal securities laws require registered brokers to keep a gift log of all gifts over a certain nominal dollar amount. Yet a company like Peachtree Settlement Funding, whose structured settlement maestra Deborah Benaim was recently a member of the Society of Settlement Planners, Inc. has raised the stakes from yesterday’s "toaster oven" to the plasma tv which could be valued in the thousands of dollars. Isn’t that like going from "Peach marmalade" to "Lady Marmalade"?
Shouldn’t judges, in the course of applying the "best interest" test under a state’s structured settlement protection act, be asking about this and, be considering how this apparently ongoing business practice has affected the payment recipent’s motivation to sell their structured settlement payment rights?
The fact that Peachtree Settlement Funding can give away a plasma TV worth thousands of dollars and have "a rewards program" with apparent impunity from state and federal regulators highlights a severe and irresponsible reguiatory imbalance and the need for regulation of settlement transfer companies. Where’s the consumer protection in an era when people are shooting people at stores to get the latest Playstation video console?
Moreover, is there discrimination because they can offer these inducements and the creators of financial security and financial advisors cannot? Should a financial advisor be allowed to "give away" a plasma tv for a satisfied client?
- How long are regulators going to stay asleep at the switch?
- If you are a factoring company seeking to improve the image of your industry, do you want the "toaster oven" approach to set your standard?
- If you are a member of congress since 2001 and you voted on December 20, 2001 for the enactment of the 2001 Victims of Terrorism Tax Relief Act (follow link to p23) which led to the creation of IRC 5891 , is this behavior what you had in mind? Is this what you were led to believe?
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