by Structured Settlement Watchdog
Consumer Advocate is an unreliable source of structured settlement information
They try to pass off 10 structured settlement factoring companies, in a financial “masquerade” of sorts.
Structured settlements are a defined term under the Internal Revenue Code 5891(c)(1) and defined therein, as “an arrangement” to pay for damages or compensation. When you’re deriving advertising revenue from an unregulated industry segment as Consumeradvocate.org admits it is, where it has been alleged that there is rampant fraud and illegal activity and consumers are getting really badly shafted financially, where a bounty has been put out to coax informants out from the shadows, it seems that anything goes.
Here Consumer Advocate even admits to be being misleading “Companies that deal in purchasing structured settlements are formally called structured settlement factoring companies, but they are commonly (and somewhat misleadingly) referred to as structured settlement companies, which is what we are calling them here“.
ConsumerAdvocate gets sucked into the “Awarded a structured settlement vortex”, typical of operators of wesbites who are trying to make money on the advice that exposes a failure to understand basis structured settlement fundamentals
They say “A settlement is most often a monetary award a plaintiff receives upon winning a lawsuit. In the case of structured settlements, the full amount of the award is split into periodic payments” Ah, no!
ConsumerAdvocate.org manages to fumble even the basics of finance
It flaps around like a fish out of water in its doomed attempt to explain the fundamentals of the structured settlement secondary market.
They say “The lump sum you receive from the buyer of your structured settlement will always be smaller than the amount the you would receive if you wait to receive all the periodic payments. This is because the present value of those future payments is smaller than the future value of the payments due to the inflation and interest rates applied to the payments. Companies apply a factoring discount rate to the settlement amount, and the resulting amount is what is paid to you”.
Comments:
- Inflation has nothing to do with a present value calculation.
- Interest rates are not applied to payments in a present value calculation, the discount rate is.
- A discount rate is the rate at which revenues (in this case periodic payments) are discounted in order to calculate the present value. A discount rate is not applied to the settlement amount.
Why “Consumer Review Sites that Claim To Be About Structured Settlements Are Mostly Useless to Consumers
- Most of not all are deriving revenue from the companies they review, disclosed or not, directly or indirectly.
- Others are merely shills for a particular company [e.g. structuredsettlement(dot)com and annuity(dot) org shills for CBC Settlement Funding]
- Most consumer review sites are plagued by poor and lazy research.
- It seems that every top 10 listing has a different cast of characters.
Consumeradvocate.org states that it “sometimes offer premium or additional placements on our website and in our marketing materials to our advertising partners. Partners may influence their position on our website, including the order in which they appear on a Top 10 list.
For example, when company ranking is subjective (meaning two companies are very close) our advertising partners may be ranked higher”
📚Related Reading
Previous Articles about Dubious Review Sites. Like a bad fire hydrant to a watchdog
Dubious Top Ten Reviews of Best Structured Settlement Annuity Companies 2018 — June 15, 2018 A breakdown of how “Top Ten Reviews” recycled misinformation and misclassified factoring companies as annuity issuers, misleading consumers at scale.
FundFirst Capital Best Structured Settlement Companies Review Scam — May 4, 2018 An exposé of FundFirst Capital’s pay‑to‑play “review” ecosystem and the deceptive signals used to impersonate independent authority.
Top 10 Reviews Misleads Consumers, Falsely Portrays Cash Now Pushers as Structured Settlement Annuity Companies — October 9, 2017 A forensic teardown of how review sites blurred the line between regulated annuity issuers and unregulated factoring companies.
Top Consumer Reviews of Settlement Purchasers Not Credible Paid Reviews — June 1, 2016 A look at how “consumer review” platforms quietly sold placement to settlement purchasers while presenting the content as neutral evaluation.
Best Structured Settlement Company” Review Site Has Low Trust Rating — September 18, 2014 Your early documentation of a pattern that would later become an entire cottage industry: low‑trust, high‑SEO review sites posing as experts.