Structured Settlements 4Real: What's Real on Structured Settlements and Settlement Planning?

Why Is Miami Law Firm Promoting "Cash Now Pusher"?

Why does the Miami Florida law firm of Gerson and Schwartz , P.A.,a supporter of structured settlements on the one hand, appear to be promoting NATLE endorsed "cash now pusher" Strategic Capital Corporation on its Miami Personal Injury Lawyer blog on the other?

Gerson and Schwartz also contends in its post of January 30, 2008 "Sale of Structured Settlement Annuities"  that that THE INTERNAL REVENUE CODE, specifically  IRC 5891 expressly authorizes the sale of structured settlements annuities by plaintiffs.

Comments

1. Perhaps the intention of these "responsible plaintiff's lawyers" was right but, the post appears to have material inaccuracies and delivers the wrong message
2. I'll leave the legal definition of the phrase "expressly authorized" to you lawyers.
3. According to Wikipedia, "The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States"
4. The  words "annuity" or "annuities" appear nowhere in IRC 5891
5. A structured settlement factoring transaction deals with the sale of structured settlement payment rights NOT the sale of structured settlement annuities, which are typically owned by a qualified assignment company.
6. The sale of structured settlement annuities requires valid life insurance license issued by the insurance department in the state of solicitation, a prerequisite which it is believed most purchasers of structured settlement payment rights DO NOT possess.
7. IRC 5891 entitled "structured settlement factoring transactions", deals solely  with the imposition of an excise tax "on any person who acquires directly or indirectly structured settlement payment rights" [See IRC 5891 (a)]. It goes on to deal with exceptions to that excise tax [See IRC 5891 (b)]. It DOES NOT expressly authorize such transactions.
8. Prior to enactment of the Victims of Terrorism Tax Relief Act of 2001, the act of Congress which created IRC 5891, the tax consequences were less clear.
9. The Gerson and Schwartz, P.A. blog post also refers to the de facto endorsement of "Cash Now pusher"  Strategic Capital  Corporation by the "Academy of Florida Trial Lawyers", a former name of its professional association which I believe has been the "Florida Justice Association" for almost a year since prior to their post. Strategic Capital pays $10,000-$14,999 as a financial benefactor of Florida Justice Association.
   

Click here for the text of IRC 5891.

The other day I questioned a Coral Gables law firm which had reciprocal promotions with the same  "Cash Now pusher" Strategic Capital on their websites. What is going on in South Florida?

Some thoughts for personal injury lawyers and leaders of legal trade associations

• What exposure to personal injury attorneys have in (1) promoting factoring (2) promoting a single company (3) promoting a single company that is a known "Cash Now pusher"? (4) promoting a single company that is a known "Cash Now pusher" because it gives a financial donation to your professional association?
• If a lawyer was going to steer a desperate client why would he or she not consider the more relevant concept of a structured settlement factoring exchange where multiple sources could be quoted easily and efficiently letting market forces take effect? Doesn't the "implied due diligence" stare right back at you?
  
• If a lawyer was going to steer a desperate client why would he or she not consider a company which DOES NOT perpetuate the fraud that is "cash now" advertising? Doesn't the "implied due diligence" stare right back at you?
• If a legal trade association such as the Florida Justice Association gives what amounts to a "paid endorsement" why would it not consider a company or entity that DOES NOT perpetuate or participate in the fraud that is "cash now" advertising. Doesn't the "implied due diligence" stare right back at you?

Florida Structured Settlement Protection Act Stifles Kick Backs to Settlement Planner Vig Takers and Sets Example For Other States

The Florida Structured Settlement Protection Act (Section 626.99296) of the 2007 Florida Statutes at Section (2)(h)  defines "independent financial advice" in such a way that puts a crimp in practice of certain of my industry brethren who think it appropriate to take money out of the pockets of tort victims by using the factoring companies as their agents.

According to the Florida statute "Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser:

1.  Who is engaged by a payee to render advice concerning the legal, tax, and financial implications of a transfer of structured settlement payment rights;

2.  Who is not in any manner affiliated with or compensated by the transferee of the transfer; and

3.  Whose compensation for providing the advice is not affected by whether a transfer occurs or does not occur.

With respect to providing advice to consumers on structured settlement factoring transactions, regulators in Florida have clearly decided that you cannot provide independent financial advice if you  are being compensated as a percentage of the factoring deal or, you are being paid a fee contingent on the factoring deal being completed.

Judges reviewing transfer applications throughout the United States are advised to be alert and, in their review process, to seek out all parties being compensated as a result of the structured settlement factoring transaction. If the buyer of the structured settlement payment rights is paying kick backs to structured settlement brokers, settlement planners, lawyers, financial planners or the like, these payments may not be disclosed. A consumer may be led to a false belief that he or she is receiving "independent financial advice" as a result.

Furthermore, such fees may make a significant difference in the "effective discount rate" that the consumer pays to effect the structured settlement factoring transaction. Consumers should be able to have the ability to negotiate those fees. Calculators are available for free, online, to help reviewing judges, consumers, lawyers, financial advisers and other interested parties to determine the effect of the added vig on the effective discount rate.

Structured Settlement Clean Vendor List

FAQ on Structured Settlement Clean Vendor List

If you are seeking advice concerning a structured settlement factoring transaction, check the structured settlement clean vendor list or, if the adviser is not on the list, ask for a written declaration from the adviser about their compensation. Such disclosure should state (1) whether or not they are receiving any compensation (2) how that compensation is determined (a % of your deal, a flat fee or other consideration (e.g. gift certificate, TV) (3) whether or not the compensation is contingent on the deal. Take that information to the judge reviewing your deal.

 

Structured Settlement Spammers Abusing Google. What Is Google Going To Do About These Parasites?

Two individuals, Mark Benedict Young and Felicitas Tan are spamming the same articles over and over again on the Internet.

Spam Article:

Structured Settlements From Lawsuits

Mark Benedict Young May 10, 2008 (posted 3 times)

Felicitas Tan May 10, 2008, May 12, 2008, May 13, 2008

Spam Article:

A Few Things to Know About Structured Settlements From Lawsuits

Mark Benedict Young May 10, 2008, May 9, 2008, May 14, 2008

Felicitias Tan May 3, 2008, May 13, 2008, May 10, 2008, May 15, 2008

Spam Article:

Getting a Huge Payout From Structured Settlements

Mark Benedict Young May 2, 2008 (posted 2 times) March 23, 2008

Spam Article:

Legalities in Structured Settlements

Mark Benedict Young March 22, 2008, March 23, 2008, March 24, 2008

Spam Article:

Legalities in Structured Settlements

Mark Benedict Young March 22, 2008, March 23, 2008, March 24, 2008

Spam Article:

Things to Consider Before Deciding on A Structured Settlement

Mark Benedict Young March 22, 2008, March 23, 2008, March 24, 2008

Felicitas Tan  March 29, 2008, May 10,2008

The utility of Google Blog Search on structured settlements is waning due to the attempted spam domination of these "parasites".

It is also evident that Mark Benedict Young and Felicitas Tan have nothing original to say.

Life Insurance When You've Got Medical Problems

Life insurance may be an important element of a settlement plan for personal injury recovery management when recovery involves a minor child or incapacitated adult, particularly if the parents are the primary caregivers.

Life insurance can be used to finance the cost of a replacement caregiver, or someone who will replace certain services that are now being provided by the deceased caregiver. This value of this use of life insurance cannot be overemphasized.

Life insurance can be a means to finance estate taxes at a discount, or to even out an inheritance if one child has the aptitude and wants to enter the family business while another does not.

Life insurance can be used as a means to fund a buy sell agreement for law partners and other businesses where for example the surviving partners have no interest in being in business with a deceased partner's spouse.

But what if you or your client have medical problems? Surprisingly Standard and Standard Plus is available on whole life with "AAA" rated life  insurers for conditions such as diabetics, people with heart problems, Cancer History, Foregn Travel and those who are overweight or have high blood pressure.

For further information call John Darer 888-325-8640

Life insurance in settlement planning, further information please click here

"Take your stinking paws off me, you damned dirty ape! ...

The immortal words of George Taylor could be uttered today by the structured settlement industry and plaintiff lawyers to structured settlement aper , "cash now pusher" and American flag symbol abuser Patriot Settlement Resources. We have no alternative but to dishonor these scoundrels with the relevant morphed image of "cash now pusher" and "structured settlement aper".

Download patriot_settlement_resources_instant_cash_bs.pdf

Structured settlement apers are a case of "monkey see monkey do" but in this case it's not flattering.

Patriot Settlement Resources Lie Number 1

Patriot Settlement Resources claims to be a "structured settlement company". It isn't.  No matter how hard these unlicensed fakers try, Patriot is a factoring company.

Patriot Settlement Resources Specious Claim

They Claim: Get the best instant cash deal around.  Are there any instant cash deals around for structured settlement payment rights? Attorneys General are urged to audit all of the financial transactions of Patriot Settlement Resources and demand proof to support this claim.  Its highly likely that there is a significant timing mismatch between what is promised in the advertising and what is actually delivered.

The President of the National Association of Settlement Purchasers (NASP) has stated that factoring of structured settlement payments is NOT like going to the ATM. It is most certainly NOT like buying a scratch off ticket at your local newsstand.

Patriot Settlement Resources Lie Number 2

They claim: A structured settlement is a monetary award like a lottery payout, inheritance or personal injury settlement. Instead of all of the money being paid out to you at once, small amounts of the total sum are released according to a fixed timetable – every month or every year – until the sum is paid in full.

A structured settlement is NOT a monetary award. The illerati keep pushing this falsehood. A structured settlement is a compromise negotiated and signed off by all of the parties to the agreement.

The illiterati falsely imply there's no implicit interest in a structured settlement. A person receiving a properly designed structured settlement will receive more than the initial cost of the structured settlement in future payments. A former child plaintiff, now 18 and with a lifetime payout could ultimately receive many mutiples in excess of the cost of the structured settlement.

Do you want a "cash now pusher" like Patriot Settlement Resources advising you, your kids, your loved one with a disability, your clients? Teenagers, 18, 19 and early 20 year olds Just "Say NO" To Pushers Of The New "Smokeless Crack" That Can Make Your Long Term Financial Security "Go Up in Smoke"

If you have the "Cash Now" DTs STOP and speak to a financial advisor, settlement planner. You may discover that there is an alternative.

Patrick Hindert Called Out On The Carpet For Specifics

A few weeks ago I received an interesting call from author and factoring promoter Patrick Hindert, who is a member of both the National Structured Settlement Trade Association (NSSTA) and The Society of Settlement Planners (SSP). He wants to debate. Game on.

Hindert told me that he is interested in "growing" the "structured settlement industry" yet he continues to display factoring plumage. Who hasn't been subject to "factoring diarrhea" from Hindert? A survey of Hindert's writings in the last 4 years shows virtually no criticism or opinion of such companies' business practices including, among other things:

1. The  "cash now" advertising fraud on consumers
2. The pervasive deceptive "big for small" lure.
3. The message by some of such companies, like Structured Asset Finance (123 Lump Sum) and others that stable value assets should be transferred (at a large discount) to buy depreciating assets.
4. The methods that some such companies use to get leads on apparently confidential sealed cases)
5. The advertising of terms associated with structured settlements that falsely suggest to consumers that factoring companies have insurance licenses and are regulated accordingly.
6. The consistently "off the mark" high discount rates charged to consumers by Peachtree Settlement Funding. Has Hindert ever suggested that consumers should shop to get better rates OR suggested as an academic, the benefit or value of dealing with such a company that consistently charges rates almost twice the most competitive market rate?
7. The Rapid Settlements representative's creepy practice of showing up at citizen's doors that was covered in Rip Off Report.
8. The use of our nation's flag and the seal of the Better Business Bureau by Patriot Settlement Resources to promote "cash now" advertising fraud.
9. The offering of kickbacks to certain structured settlement brokers, settlement planners financial planners and lawyers to get leads, the acceptance of same and the absence of adequate disclosure of same to consumers and the resulting effect on the transaction.
10. The factoring industry chiseling away at structured settlement protection act requirements to obtain independent financial advice by structured settlement recipients. At the same time inconsistent Hindert promotes settlement planning.

Consider all of the above while Hindert authored numerous challenges and criticism of the trade associations to which he belongs. While I may agree with some of his criticism of the industry (which has heretofore been slow to adapt to new media) as healthy, Hindert's selective silence in comment and criticism of "cash now pusher" business practices is notable.  How do the above business practices help consumers?

Hindert has been an active promoter of the flawed "one structured settlement industry" theory (primary/secondary market) and this author believes the de facto endorsement by the co-author of the seminal industry text has emboldened the factoring industry members who engage in behavior that enrages judges and the plaintiff's bar. How does he resolve the regulated vs unregulated issue?

What are Hindert's specifics to his apparent theory that Route 1 to (primary) industry growth is through the unregulated and unlicensed factoring industry?  Vague is no longer in vogue Hindert!

Hindert is called upon to write a white paper laying out the specifics of his thesis.

Marketing Spin Doesn't Cover Up The Fact That One Industry is Regulated and Requires Licensing and Advertising Standards and The Other INDUSTRY Doesn't

Cash Now Pusher Stone Street Capital has created a web page to try and position itself as being part of the structured settlement industry. Fakers eventually get exposed and here's an example with the impostor revealing language highlighted in blue.:

"Insurance companies have multiple roles in regard to structured settlements. They are often the defendant in a lawsuit, more often they are providing insurance coverage to one of their customers who has been sued. If a case is settled with a structured settlement, the insurance company will either purchase or issue an annuity that will pay the settlement recipient for the predetermined number of years. Settlement terms can range widely, paying recipient for as many as 10 - 40 years or for the remainder of the recipient’s life."

Download structured_settlement_market___stone_street_capital_05112008.pdf

Comments:

Cash Now pusher Stone Street Capital incorrectly states that insurance companies are often the defendant in a lawsuit. Perhaps if you are in a state like Louisiana where insurers can be sued, but I don't believe that subtlety came into their thinking in penning the statement.

Stone Street Capital also states that the insurance company (which they've already incorrectly stated is often the defendant in a lawsuit) "will either purchase or issue an annuity". Most structured settlement annuities are purchased by an assignee via qualified assignments. The defendant's insurance company (or as Stone Street would have it, the "insurance company defendant") does not "issue an annuity".

Some die hards in the "factoring industry" like Stone Street continue to follow the Patrick Hindert mantra set out on a concept map that there is primary market and a secondary market segment as part of one big structured settlement industry. It's a boring intellectual exercise but the reality is that there are two separate and distinct industries where there has been an attempt to forge together in name only by opportunists like Stone Street Capital, "pay per posts" that write for and link to them, and the like who feign expertise in structured settlements.

Consider the following substantial differences:

STRUCTURED SETTLEMENT INDUSTRY

1. Individuals and companies who place structured settlement annuities must hold a valid insurance license and be appointed by multiple annuity issuers. 
2. Licensed individuals must comply with state continuing education requirements, including regulations concerning advertising.

FACTORING INDUSTRY

1. There is no requirement to be licensed to be get someone a "cash now fix".  Not only are some factoring companies not required to be licensed, due to regulatory oversight, but a number of entities appear not to be registered to do business with the Secretary of State in all States in which they solicit the "cash now fix"
2. Other than FTC, "truth in advertising" there are no state advertising laws in place to cover solicitation. This has fostered and encouraged the misuse of terms by factoring companies and bad business behavior, purportedly including factoring company representatives showing up unannounced on people's doorsteps. There are things that these people say that those of us that are regulated would not be able to say.
3. Lack of regulation keeps the pushers "on the street corner", on your TV and in the darkest alley ways of the subliminal, targeting YOUR children, YOUR Dad, YOUR Mom, YOUR ward, your Aunt, some of whom are profoundly injured or emotionally vulnerable.

So there is no conundrum here. A cash now pusher IS NOT part of the structured settlement industry simply because of an inarticulate rendition of facts or marketing spin. Those that are regulated do not want to be lumped together or be associated with the acts of the unregulated factoring industry.

More supporting evidence of separate industries:

October 8, 1998 JG Wentworth website stated about what it does "Businesses have been doing it for years-they call it factoring. We call it Advanced Funding" Download welcome_to_j.G 10081998.pdf . This message continued through 2000 and 2001 Download welcome_to_the_j.G Wentworth 11282001.pdf  and into as late as August 2002, after the creation of IRC 5891. Download welcome_to_the_j.G Wentworth 08022002.pdf . THEN, in September 2002, JG Wentworth began to disassociate from the word "factoring"-what "businesses have been doing for years" in favor of "Advanced Funding" and for the first time unveiled its "structured settlement program" (as opposed to structured settlement factoring program) and officially became a "cash now" pusher.Download welcome_to_the_j.G Wentworth 09222002 cash now first appearance.pdf . JG Wentworth began to refer to itself in advertising as a "finance company"

In 2004, JG Wentworth, for the first time outrageously claimed to be "the leader in structured settlements". The meta tags for the web page relegate the word "factoring" to an afterthoughtDownload j.G. Wentworth_ Advanced Funding _ Cash For Structured Settle 2004.pdf

The structured settlement industry is not about some old fart pushing you for a "cash now fix", or a bunch of idiots half smiling as they're screaming from balconies that they want "cash now" (which they really can't get "now" from the advertiser), or salesmen who imply you should trade a stable value asset with a high credit rating, for a discounted present value, with the idea of running out and purchasing another asset guaranteed to depreciate in value. But the face of the factoring industry is.

NASP President's Company Google Ad Nonsense

Is there anywhere on the ad below, that appeared in a Google Search for "Structured Settlements GA", that gives any indication that it is a structured settlement factoring company. Despite advertising to the contrary and unless it has changed its business model, Novation Capital DOES NOT deliver structured settlement quotes. It is also not a structured settlement General Agency (GA).

Here is the ad (the URL link has been disabled for this post- you can see in the download below)

Structured Settlements
As Seen on TV - Call The Experts
800-486-1525 - Free Quotes and More
Download novation_cap_offensive_google_ad_5112008.pdf

Mr. Shapiro, those crazy outsourcers are at it again! Blame it on the dog!

You did such a nice job in helping to validate the "cash now" fraud in your industry, how about continuing to set an example by stopping advertising what you don't do and start advertising what you DO do.

House Investigation Into Plaintiff Lawyer Kickbacks on Class Action Cases?

Tulsa settlement planner Robert Risk's February 13th "man of class and grace", disgraced class action lawyer William Lerach, reports to Federal Prison on May 19, 2008 after pleading guilty to charges of criminal conspiracy in conjunction with a class action scheme. Two Republican members of the House of Representatives, John Boehner (R-OH) and Lamar Smith (R-TX) recently suggested that Congress has ignored the steadily unfolding scandal and call for a hearing.

"If in fact the crimes committed by Mr. Lerach and his colleagues are an 'industry practice' as Mr. Lerach himself confessed, then the United States Congress is sitting idle while criminal behavior in the trial lawyer industry threatens American jobs and feeds like a parasite on the prosperity of working families" Boehner stated in a letter to House Judiciary Chairman John Conyers (D-MI) dated May 2, 2008.

Are we shortly going to see people start defending the payment of kickbacks as "helping consumers"?

Maybe, if the comments to the Wall Street Journal's Nathan Koppel in Kickbacks to Plaintiffs: Industry Problem? provide any indication. Click here to read the post and the comments

There is an interesting social debate here.  On the one hand it is argued that the kickbacks made by Lerach and others, purportedly help consumers. Some argue that without the payoff it wouldn't be worth a lead plaintiff's time; that the consumer helping class action suits couldn't be launched and the legal work done helps consumers. The flip side of the debate says that the kickbacks cost American companies money, results in shutting companies down or forces them outside the United States; the resulting loss of American jobs or other incremental costs ultimately hurts American consumers.

New Tool Helps YOU Take Control and Know When To Tell Peachtree Settlement Funding to "Shove Their Offer Up Their Ass"

The Structured Settlement Factoring Discount Rate Calculator puts cash strapped structured settlement recipients in control.

A structured settlement factoring transaction is the source of cash of last resort for those structured settlement recipients who have exhausted all other options. Unfortunately many tort victims are victimized however, through their own ignorance and laziness, by cash now pushers like Peachtree Settlement Funding and others (click here for the "cash now" pushers list) who opportunistically charge high discount rates, due to a lack of regulation of such companies and perhaps due to the knowlege that a significant percentage of consumers are so desperate that they won't shop (even though better rates can be had elsewhere). While it is hoped that the situation will change in the near future, now there is an easy way for you to take control. There is no need for you to be a victim! Take control NOW!

With the Structured Settlement Factoring Discount Rate Calculator you, your lawyer, settlement planner, or your financial advisor can easily input the offer that you receive from a company like Peachtree Settlement Funding and then tell them to "shove their offer up their ass"

To access the Structured Settlement Factoring Discount Rate Calculator simply click the title highlighte in blue and then enter the requested information. If it seems to tough to handle then STOP, immediately call your financial advisor, settlement planner or someone who can help you enter this information. It is critical to know what the discont rate is after all expenses so that you can evaluate what the deal is going to cost you. For example if some windbag from a cash now pusher is telling you to sell your structured settlement payment rights to buy a boat, an alternative investment, throwing a plasma TV into the deal and you use the calculator to determine that there is an effective discount rate of 19.9% that is a pretty crappy alternative for you.

Another thing you can use the calculator for is to determine the net effect of structured settlement factoring vig paid on your case. Structured settlement factoring vig is the term used to describe commissions and/or referral fees paid to persons or companies who refer business to factoring companies or factoring brokers.  It is possible that the person making the referral is taking vig and not disclosing this to you, or the amount. YOU NEED TO KNOW  (1)whether that person is taking a fee (SO ASK THEM UPFRONT- HOW MUCH? HOW IS IT CALCULATED?)  and (2) the effect of that commission/fee on the ultimate discount rate you are paying. You should ask for a quote with and without a fee. If the settlement planner or advisor insists on getting paid instead of working pro bono then, armed with the information about the effect of their fee on the discount rate you have the power to negotiate. If they won't negotiate then consider working with someone else, or someone who will not charge such a fee.

You can check the structured settlement clean vendor list. The individuals on this list, including this author, have made declarations under penalty of perjury that they do not take the "vig". While it may beg the question, if an individual is not on this list that doesn't automatically mean that they are a vig taker. You must ask them and get it in writing. Only 2 settlement planners have openly declared that they take referral fees, even though factoring broker Rhonda Bentzen publically declared in December 2007 that 90% of her clients do. Other sources besides Bentzen tell us that settlement planners are building in referral fees, some substantial, whether it they disclosed or not!

Kudos to Andrew Cravenho at the Settlement Quotes Factoring Exchange for posting this valuable discount rate calculator tool for consumers, lawyers, judges, settlement planners and advisors.