by John Darer CLU ChFC MSSC CeFT RSP CLTC
It has come to my attention that certain settlement planners entrusted with the stewardship of protected information about injury victims with structured 
settlements, have sold that information to structured settlement factoring companies for financial gain.
So that it is perfectly clear, I'm not speaking of a single referral for someone with a genuine need. I'm referring to settlement planners trafficking hundreds or even thousands of names of annuitants, details of their annuities, annuity issuer, payment streams and contact information in exchange for hundreds of thousands or even millions of dollars. Information that these folks did not have the authority to sell and may even have lied in the placement of the structured settlement by saying that the information was confidential. They may have also misrepresented to the buyer of the protected information, that the settlement planner had the authority to sell the protected information from each and every one of the parties to the deals.
The motivation behind individuals selling protected data to structured settlement factoring companies and investors may stem from pure greed or desperation, often accompanied by a reckless disregard for how the data will be utilized, potentially resold or reused, and any legal obligations they might have.
Those going down this rotten path abrogate the trust in them by clients and their lawyers and placing them like fish to shoot within a barrel despite that it being known that:
- Structured settlement factoring has shifted from being a justified source of liquidity to a troubling trend marked by countless cases of undermining a stable income for annuitants, often facilitated by unscrupulous lawyers and inattentive judges who fail to handle the responsibility properly.
- Sales practices and licensing remain unregulated, except in Maryland, Minnesota, South Carolina, Georgia and Louisiana, despite countless documented cases of systemic harm to a stable source of income.
- Factoring companies are collectively going for every last penny.
- The structured settlement factoring industry has attracted individuals such as convicted felons, tax evaders, Ponzi schemers, and forgers, none of whom would be allowed to participate in the primary market.
- There’s hardly any accountability for bad behavior, with scams and false advertising running rampant. Unqualified representatives often manipulate and exploit others financially, repeating these harmful actions time and again.
- Hedge funds, private equity, and other entities supporting unethical individuals have vast resources to challenge fraud victims, even targeting those with severe intellectual disabilities..
- There is endless documentation of fraud on the Courts, induced by structured settlement factoring companies.
- There have been more than two hundred instances of forgery of Court documents related to structured settlement transfers in the last 6 years that have been made public.
- There are notary publics who take bribes from structured settlement factoring companies to help them find deals.
In my opinion it may be time to blow the whistle on these "ethical skunks", who gained the trust of their clients and likely made millions in placing the structured settlements in the first instance and now a mere disgrace to the structured settlement and settlement planning industry. They deserve to be outed and punished for disseminating protected information for profit.
At the time of posting, my company, 4structures.com LLC is the one of the only companies in the structured settlement industry that has published a transparent written policy on structured settlement factoring. Why is that?
Every affidavit that I sign in conjunction with the placement of a structured settlement bears the following:
"Neither I, nor my firm, will: (a) provide any information about this settlement to any factoring company for any purpose; b) solicit the plaintiffs or plaintiffs’ family on behalf of any factoring company for any purpose, including, but not limited to, the proposed sale of plaintiff’s future periodic payment rights, nor will I or my company participate, assist, promote, or aid in such solicitation by any person, firm, corporation or entity; or (c) seek or accept any consideration financial or otherwise, directly or indirectly from a factoring company, with respect to the proposed structured settlement."