John Darer of Structured Settlements 4 Real commented on our latest blog post, reinforcing the original 10 potential improvements that can be made to the structured settlement factoring industry. This author would like to comment on several points made by Mr. Darer.
John: "I would like to see a neutral Seller's Guide to Structured Settlement Factoring be produced and required by regulation to be distributed on initial solicitation or at least with contract forms. Such a guide would be parallel in nature and purpose to the Life Insurance Buyer's Guide that is required in the life insurance sales process in many jurisdictions."
Comment: I believe that a Seller's Guide to Structured Settlement Factoring would tremendously improve the industry once enacted. This should be a top priority in the next NASP meeting.
John: " No doubt number 9 could be an issue for the likes of opportunists such as Peachtree Settlement Funding (NASP's second largest member) who have heretofore had the reputation of only doing deals with discount rates in the high teens."
Comment: Mr. Darer was referring to the 9th improvement: "Standardized caps on structured settlement factoring discount rates." While Peachtree and other factoring companies have been known to factor structured settlements with discount rates in the high teens, these companies will still be able to make profits even if the discount rates were capped much lower. From a business stand point, tort victims who are uneducated in the form of transferring the rights to their structured settlement payments will still agree to discount rates that are capped in the mid to low teens, which leaves a margin of profit for most structured settlement factoring companies.
Our goal isn't to eliminate companies that do offer higher discount rates, but is to improve the structured settlement factoring industry. In return, the primary market will benefit by the more desirable outlook of the secondary market.
John: "With respect to number 6, I think regulations concerning disclosure of any compensation to anyone as a result of the structured settlement factoring transaction would be apropos. This would prevent a disclosure of payments to one firm who then pays undisclosed kickbacks to another firm. The consumer should know who is getting paid, how it affects their discount rate and the amount of money that ultimately gets into their pocket."
Comment: Our comment, "regulations justifying structured settlement broker commissions in factoring transactions," is not accurate and does not show Settlement Quotes, LLC's standpoint on the matter. We work with several structured settlement brokers and do not mind paying commissions to these individuals. Mandatory disclosure of all fee's and commissions for all parties involved in a structured settlement factoring transaction is a better view of our standing. This regulation would include Settlement Quotes to disclose our fee to clients.
John: "The structured settlement and factoring industries should consider a pan industry task force that pools efforts to hunt down and thwart owners of "scraper" "made for Google Adsense websites" that steal content from either industry's member websites and then misinform the public."
Comment: I agree 100% with this viewpoint and would gladly help in this effort.