by Structured Settlement Watchdog
What is Court Scraping?
The acquisition of data about pending and prior structured settlement transfers from publicly available court filings by cash now pushers or data mining companies who sell it to the settlement purchasers. The actionable information mined from this data could include, among other things, names, addresses, phone numbers, relatives and specific terms of the structured settlement, identifiable information about settling parties to the underlying litigation that resulted in the structured settlement and more.
How Prevalent is Court Scraping?
It seems that most settlement purchasers engage in court scraping
You Mean My Court Record is Not Confidential?
Check one of our basic constitutional rights, the First Amendment.
While the United States Supreme Court has not directly addressed whether the public and the press also have a constitutional right of access to civil proceedings, the California Supreme Court noted that “every lower court opinion of which we are aware that has addressed the issue of First Amendment access to civil trials and proceedings has reached the conclusion that the constitutional right of access applies to civil as well as to criminal trials.” NBC Subsidiary (KNBC-TV), Inc. v. Superior Court, 980 P.2d 337, 358 (Cal. 1999)
Third Circuit found that in both civil and criminal cases “the existence of a common law right of access to … inspect judicial records is beyond dispute.” Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1066 (3rd Cir. 1984).
Source: Reporters Committee for Freedom of the Press.
In Courthouse News Service v Planet United States Court of Appeals for the Ninth Circuit DC 2:11-cv-08083 the panel reversed the district court’s dismissal of a complaint and remanded in an action brought by Courthouse News alleging that Ventura County Superior Court violated its First Amendment Rights for failure to provide same-day access to newly filed unlimited civil complaints.
Why is Court Scraping So Important to Cash Now Pushers?
- Origination costs are very expensive. Few settlement purchasers can afford the cost to sustain television ads to compete with the advertising spend of a JG Wentworth, and a few others.
- There is alot of competition
- There is a limited universe of in-force structured settlements.
- Less than 10% of people sell their structured settlements, according to published estimates
- A likely belief in the concept that if an annuitant has sold once, he or she will sell again, particularly with a little “helpful prodding” by the settlement purchaser.
- Court scraping gives a settlement purchaser the opportunity to monetize the work of others.
How Do Settlement Purchasers Justify the Court Scraping as a Benefit to Consumers?
Proponents argue that the dominance of the big advertisers juxtaposed with the laziness and/or ignorance of sellers means that people do not shop around as they should. Those that enter into structured settlement factoring transactions may be not be getting the most favorable rates. They say that court scraping and the resulting notification of annuitants that “better rates are available” has served consumers to drive discount rates down.
The Dark Side of Court Scraping
The dark side of court scraping of structured settlement transfer applications is when the information is used in an abusive solicitation or approach to a structured settlement annuitant. Unfortunately this seems to happen all too often in a the structured settlement secondary market which enjoys a legendary ineptitude on self regulation.
Upon information and belief, the Terrence Taylor case involved court scraping by at least one of the settlement purchasers along the daisy chain of settlement purchasers.