by John Darer® CLU ChFC MSSC RSP CLTC
Investing in structured settlement receivables IS NOT the same as receiving a structured settlement for payment of damages from your lawsuit or buying an annuity
Structured settlement payment rights offered to investors are also properly defined as structured settlement receivables because of the contract of sale to the investor is known as a “Receivables Purchase Agreedment”. If you look around you may see the terms structured settlement derivatives, recycled structured settlements, factored structured settlements and the scam label secondary market annuities.
Structured settlement payment rights are the rights to receive payments from a structured settlement
There are critical differences to Investing in structured settlement payment rights compared to buying an annuity, or receiving structured settlement payments as damages or as a named beneficiary of someone receiving structured settlement payments as damages*
- A factored structured settlement is not an annuity.
- Structured settlement payment rights can be transferred to a buyer subject to a court approval process The buyer is not buying an annuity.
- The rate of return is illustrated as higher because the seller has agreed to a discount.
- Investors in structured settlement payment rights or receivables, should have no expectation of any statutory protections that might be available to annuitant
- Investors may be exposed to payment servicing risk that could lead to payment delays servicing. The Sutton Park NIghtmare (2024-2025), which affected partial sellers and investors, is an extreme example.
Some companies misrepresent structured settlement receivables as annuities, exploiting life insurer trademarked logos and brand to enhance their deception
Until I posted about it, SHP Financial , of Plymouth MA, did the latter and even grossly misprepresented in still live Tweets on two occasions, that the payment rights were “just like a CD“.
The Washington DC office of the international law firm of Hogan Lovells, has issued a useful memorandum to members of the National Structured Settlements Trade Association about the marketing and distribution of structured settlement payment rights. Download Hogan_Lovells_Memo_Marketing_and_ Distribution_ of_Factored_ Structured_ Settlement_ Payment_ Rights_April_ 5_2014
If you are currently a plaintiff in a lawsuit or a trial lawyer seeking to structure fees and have been solicited to buy structured settlement payment rights as part of the solution, you should read the memorandum
The Hogan Lovells memorandum shares the differences between structured settlements and structured settlement payment rights and cites avariety of legal cases which show that transactions to buy structured settlements in the secondary market can go wrong.
Last updated December 24, 2025
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