by John Darer® CLU ChFC CSSC
The annoying television and internet ads by companies that purchase structured settlement payment rights have been inducing consumers with claims that the advertisers give them "cash now". The word "now", in the context used to induce consumers, clearly implies "at once" or "immediately". So, in the context used, isn't "cash now" really a fraud on consumers?
Doesn't the recent statement of the President of that industry's professional trade association (NASP) shine the light on the potential fraud and support this theory?
"Today?" Wow! You are absolutely right on this one. The "instant gratification" pitch is wrong. And it makes no sense for us because when we talk to prospective customers, we always tell them that the process takes months. We provide a service that allows people to meet life's changing needs; we're not an ATM machine".
Robin Marc Shapiro, President of the National Association of Settlement Purchasers April 11, 2008 (underlines for emphasis)
Clearly if the settlement purchasing industry knows at the time the advertisements were published that "cash now" is untrue then why are its members advertising it? More importantly why aren't attorneys general locked and loaded?
Are you a financier participating in a deal with an entity that advertises "cash now" for structured settlements but it's known that it can't be delivered as advertised? What's your exposure as a result of that association?
Unless they can supply absolute proof that they can supply cash at once or immediately, the settlement purchasing industry would be wise to cease "cash now" sales pitches for the benefit of consumers.
No doubt some clever company will try to justify itself by stating that a consumer could REALLY get "cash now" if they are willing to pay a higher price (to absorb the 40% excise tax that the Feds would levy on the factoring company for not obtaining a required qualified court order to avoid it set forth in IRC 5891). If the 40% excise tax business is what is being targeted then where is the disclosure in the advertising?
Under the Federal Trade Commission Act
- Advertising must be truthful and non-deceptive;
- Advertisers must have evidence to back up their claims; and
- Advertisements cannot be unfair.
Clearly there's a line to be drawn between a consumer needing "cash now" and the factoring company's ability to deliver "cash now". Companies that purchase structured settlement payment rights, or brokers facilitating same should not be permitted to imply in oral or written communication, of any sort, that consumers will get "cash today" or "cash now" in relation to a structured settlement factoring transaction.
Click here for the Federal Trade Commission's FAQ on Truth In Advertising
This is a partial List of companies that use "Cash Now" in advertising to consumers on April 13, 2008:
Structured Asset Funding (a/k/a 123 Lump Sum) Download structured_asset_funding_cash_now_4132008.pdf and Download http___www.structuredassetfunding.pdf AND Download http___123lumpsum.pdf (claims you can get a lump sum today)
Woodbridge Investments Download woodbridge_investments_cash_now_4132008.pdf and click this link where Woodbridge adverstises that you can sell your structured settlement for cash instantly
Peachtree Settlement Funding (falsely advertises "get all your money now")
Download peachtree_all_you_money_now_4132008.pdf
Patriot Settlement Download patriot_settlement_cash_now_4132008.pdf
Nationwide Funding Resources Associates
Settlement Money Now
FS Gerard
Via Trust Inc.
JG Wentworth Download jg_wentworth_cash_now_4132008.pdf
Diversified Investment Services
Rapid Settlements, Ltd.
Washington Square Financial, LLC
Prosperity Partners
Stone Street CapitalDownload stone_street_capital_cash_now_4132008.pdf
American Settlement Funds (alter ego of JGW)
FDR Resources- a/k/a 'money-now.net (advertises "structured settlements cash today")
American Financial Freedom
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