Jake Stump of the Charleston Daily Mail published an article this morning about the pending legislation bill for structured settlement factoring companies in West Virginia. The new West Virginia bill would require the following:
- courts to appoint a guardian ad litem (attorney or other financial professional to act as the person's guardian in front of the court)
- changing the standard for approval from “best interests” to requiring clear and convincing evidence that the transfer is to avoid a financial hardship (and is in the seller’s best interest)
- companies buying structured settlement annuities would be required to pay their own attorneys' fees in court
This author believes that these changes will help tort victims moving forward in the state of West Virginia, but this author does not agree with the comments by Delegate Ron Walters who introduced this bill into legislation.
"They thought it'd put them out of business, which is exactly what I want to do," Walters said. "Everyone's seen the commercials about getting cash now from a structured settlement payment. They're just preying on people."
Its unfortunate that a man in Mr. Walters position would sum up a few bad apples, as an entire industry. There are a few companies that do create a bad name for the structured settlement factoring industry with their horrible marketing techniques, preying commercials, and unfriendly consumer discount rates. It is true that these companies are more concerned about their profit margins than the structured settlement annuitant. These bad apples are ruining this industry for the companies that do provide the tort victims with exceptional offers.
"They're paying them pennies on the dollar," said Walters, lead sponsor of the bill. "I know of a case where a woman was entitled to $1,000 a month for 100 months. That's $100,000 in what we call 'future value.' They offered her $7,549, and she took it."
Yes, in this case a company was preying on this individual, and its unfortunate that she didn't receive a second opinion from a respectable company, where she could have received almost 10x that amount.
Its important for the companies that can make a difference in this industry to step up and make a difference. Purchasing the largest amount of payments does not make you the leader, but proving that you can make a difference when it counts speaks louder than money will ever.