The following excerpt appeared in a Factoring Channel blog post dated October 31, 2006
"New York Attorney General Eliot Spitzer is suing Pennsylvania based life settlement company Coventry Financial for allegedly defrauding consumers by paying kickbacks to brokers who were bringing them customers. This type of behavior has been brought to light in many industries of late. The Settlement Channel has discussed similar cases and the effects they will have on the structured settlement industry. This should be a wake-up call for settlement factoring companies as well. Mr. Spitzer is taking aim with a shotgun and he is going after anyone and everyone who is not doing things the right way. Structured settlement brokers and structured settlement factoring companies need to be aware that such scrutiny may be coming their way too. Factoring companies should be aware of who is bringing potential customers. If they are brokers, are they shopping around for their customers to get them the very best price or are they consultants who are shopping to get themselves the best deal? Or, are they outside sales people dressed up like brokers who really don't shop around, but bring all leads to one funding source only?"
Obviously Eliot Spitzer is now Governor and Andrew Cuomo is AG. The material however, is instructive. Any doubters ought to read Matt Bracy's post, related stories covered by Mark Wahlstrom on The Settlement Channel, the Coventry Financial law suit, and examine their own individual business practices concerning structured settlement factoring compensation. If you're taking money, not disclosing it or its impact on the bottom line to tort victims, not disclosing that it's negotiable, and profiteering on the backs of desperate tort victims there is a good chance you're going to get nailed.
And how about the rest of you who are NOT taking money. Are you going to sit back and let the "structured settlement factoring vig" takers bring you down?
THINK ABOUT IT! Are you going to be proactive or reactive? It's your choice.
The Structured Settlement Business Practice Declaration on Structured Settlement Factoring Compensation Download StructuredSettlementDeclarationonFactoringPractice.pdf gives you the ability to distance yourself from the behavior of others through a published affirmation.
I also hate to think about the possibilty that it's happening but if there should be any general agents in the structured settlement or settlement planning industry who have sought to make an override on referrals made by their "independent consultants" or employees they may want to rethink their strategy.
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