by John Darer® CLU ChFC MSSC RSP CLTC
Understanding Structured Settlement Factoring is an Education Module in the Registered Settlement Planner professional designation program‘s Settlement Planning Seminar
The second RSP course entitled “Settlement Planning Seminar” includes the educational module on factoring featuring Robert Ostrov 
. Ostrov is in-house counsel to “cash now pusher” Structured Asset Funding a/k/a 123 Lump Sum), formerly of “cash now pusher” Peachtree Settlement Funding. He is also a former Assistant District Attorney for Orange County, New York. Furthermore, at the time of publication he is running for a seat in the Florida state legislature (District 87).
Ostrov comes off as very knowledgeable in a 64 slide audio-visual presentation. In particular, he is knowledgeable in discussing what motivates people to sell structured settlement payment rights
Possible Motivation for Selling Structured Settlement Payment Rights
- Pay off Debt
- Avoid Bankruptcy
- Avoid Foreclosure
- Avoid Eviction
- Medical Emergencies
- Pay Tuition
- Start a business
- Pay off tax liens
- Purchase a home or a car
- Hire Criminal Defense Counsel
- Pay Off Child Support
Seemingly honorable reasons for someone who has failed to plan for liquidity needs or to whom fate has dealt misfortune.
Ostrov selectively omitted that his employer suggests pennies on the dollar trade for luxury purchases
Ostrov omitted that at the time of publication, Structured Asset Funding, the “cash now pusher” he is in house counsel for, advertises implausible, impulsive reasons to sell your structure payment rights. And I quote, “(to) enjoy the thrill of your dream car or boat, or travel in style in a new RV. Turn the monotony of uninspired transportation into a distant memory”. The ad includes a picture of what is believed to be a Ferrari.
This is unfortunately typical of the two-faced baloney that we’ve come to expect from the leaders in the structured settlement factoring industry
- I think the factoring industry will never earn the respect of the structured settlement industry or many lawyers. This will remain as long as some of its members keep engaging in sleazy advertising and solicitation practices, especially during times of economic uncertainty.
- On the positive side Ostrov provides valuable insight into the factoring industry modus operandi from a marketing standpoint. He does this by comparing factoring effective discount rates to current credit card rates. Ostrov states that the factoring industry average effective discount rates are 16% compared to the average credit card rates of 21%. He then proceeds to show how Sears charges 23.4% and has a default rate of 28.4%. Exxon Mobil charges 21% and has a default rate of 24%. Lowes charges 21%. Finally, JP Morgan, Citi and Bank of America each charge a penalty rate of 30%.
- In my opinion this is nothing but marketing spin. However, I will leave it to a factoring industry thought leader, Andrew Cravenho of the Settlement Quotes, LLC factoring exchange, to write a post to lay waste to Ostrov’s message. Cravenho can tell us that far better than 16% rates can be found with a little effort.
- Having recently arrived at Structured Asset Funding from Peachtree, and having subsequently given this explanation, Ostrov is to be thanked for giving RSP candidates and “the world”, thanks to this post, a window into how Peachtree Settlement Funding might attempt to justify its consistently out of touch effective discount rates.
- Ostrov also attempts to justify the high rates, reasoning that it’s to “account for risk of default” citing Executive Life, Reliance and Confederation Life as examples. If so, why are such rates being charged for transfers involving such companies as New York Life, Metropolitan Life and Pacific Life? All three of these magnificent longstanding companies have been in business since the 19th Century (New York Life (1845), Metropolitan Life (1868) and Pacific Life (1868).
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