There's no secret to those of you have read Structured Settlements 4Real of my advocacy against the attempt of the advance funding and/or factoring industry to define structured settlements. That a broker might consider working on both the creation and destruction side of the structured settlments for compensation is a topic worthy of discussion. I am already in the process of conducting a survey of lawyers to get their opinions to questions which are posted on my blog. I'm also interested in broker opinions. So here we go? Answer what you feel comfortable answering and feel free to contact me privately if you wish to remain anonymous and we'll just use your responses as part of our statistical evaluation.

1.How do you feel in general about factoring company advertising?

2.What do you think of the potential consumer's experience when he/she is trying to learn about structured settlements on the Internet? If you want type in some key search words on Google, Yahoo, MSN and describe your experience.

3.Do you participate in referring business to factoring companies for compensation?

4.Do you think there's any conflict of interest for a "creation side" structured settlement broker or settlement planner receiving additional compensation on the "destruction side" on the same claimant?

5.Have you done a marketing campaign to your existing clients to disclose your services in the factoring arena?

6.Do you plan to marketing campaign to your existing clients to disclose your services in the factoring arena?

7. Do you think the current regulation of factoring companies is sufficent? If not what would you suggest to improve the situation.

8. How do you feel about the Symetra (a member of NSSTA) announcement stepping into the factoring field outside of its own annuitants?

9. Should factoring companies be permitted to join NSSTA?

10. Do you see it as an asset to the SSP that it has at least 4 factoring companies as patrons?

11. Has any web site or web log attributed to a factoring company, or search engine optimizer of a factoring company, used any of your's or your company's name, trademarks, service marks, or copyrighted content from your web site or anything else you have published without your authorization?

Your answers and thoughts are appreciated and will go a long way to helping to improve things for all of us.

That's alot of questions JD, but all important.Factoring company advertising is incredibly confusing and in many cases deceptive. Kudos for a great job on your blog, outing some of the great offenders, but it seems more needs to be done by the rest of us. Regarding "conflict of interest" I think there is one and a number of attorneys that I've asked would not like to see me approaching the plaintiff that I recommended a structure to to then turn them onto a factoring company for another commission. Just doesn't smell right. I definitely don't think factoring companies belong in NSSTA.They need us more than we need them.I'm wondering what if anything we should do about Symetra now that it has taken the step that it has with Clearscape. The SSP having (is it 4, or more?) factoring companies would be a valid reason to question the credibilty of the SSP as being a plaintiff advocate. It is quite a stretch to include factoring when you look at SSP's posted mission statement. What do other people think?

John,

Jump in any time you have an opinion. Don't be shy. I can see the open forum is going to be a big hit and when I get back this evening i'll take the survey. Thanks for calling the industry's attention to this issue JD. I'll be starting a similar crusade next month on the ethics and issues surrounding the "legal finance" industry and how it is starting to quietly and behind the scenes get into bed with both the settlement industry and trial lawyers.

I'd like to add one additional question.

12. It has been said that advanced funding or "factoring is part of the settlement planning process". Do you agree? If you do, please elaborate for all of us in the industry and the lawyers who read this blog why you believe that it is?

No way that advanced funding is part of the settlement planning process. My clients would not approve I wouldnt want to be part of an organization includes what Darer coins the "destruction" side of structured settlements. I'm interested to see how this survey and Darer's attorney survey turns out.

The NSSTA Board should seriously consider a sanctions of Symetra, including possibly suspending it from NSSTA. Why should Symetra, through its alter ego, Clearscape Funding, be permitted to solicit members of NSSTA regarding Clearscape Funding? Always considered Roger Harbin to be one of the best minds in our business. Didn't think he'd rubber stamp something like this.

Pretty strong stuff Joe. However, I agree that NSSTA needs to give Symetra a good knuckle rap over this and make it clear that it does not endorse Clearscape, or NSSTA will find itself in the same quandry that SSP does over factoring

Here's a thought... You design a structure, a portion of which has lump sums every 4 years and make your commission, or split of commission at the time of creation of the structure. 2 years later the payee comes to you and wants to sell his payment. You call a factoring company which runs a quote and asks you how much you, the broker, want to be paid (this is the reality folks). Is it right for you to accept the commission, especially since you can build in what you want? Do you call the plaintiff attorney who referred you to the case to let him know what you are contemplating? Does your E&O coverage cover negligent advice given for factoring?

All great comments. I personally think that if NSSTA doesn't allow other funding companies in as members, then a serious look needs to be taken at Symetra on this. I personally like the firm, don't mind the life markets entering as there are situations where the sale or surrender of the product is valid. However, if other firms are barred membership, how is it justified to allow them to continue?

This is pretty strong. I don't see how NSSTA can justify Symetra's continued membership in NSSTA if it is promoting factoring on a wholesale basis. Accomodating its own annuitants is OK. I think they should be banned from promoting Clearscape Funding at any NSSTA meeting to send a clear (no pun intended!) that their behavior is not looked at favorably by the Association. We've got to maintain the integrity of the NSSTA and its members among the legal community.

I agree with John. A formal approach shoudl be taken by the NSSTA leadership warning Symetra that they need to do something ASAP. If they thumb their noses to us then a motion should be brought at NSSTA Annual meeting to expel them from the Association. Let the SSP have them! Jim Ferris is turning over in his grave

Paul,

I don't think anyones E&O covers factoring transactions. They aren't life products, they aren't regulated or licensed and I would be hard pressed to think of any arguement that would shoe horn them into a professional liability policies coverage. I really believe the entire concept of "negligent referral" is going to raise it's head not just on factoring, but with many of the trial lawyer "endorsements" of their approved brokers if anything goes wrong.

The gist of some factoring sale pitches is that it's Court approved so it must be OK. There are some notable cases in which Judges have denied the factoring transaction as not being in the best interest of the payment recipient (the owner of the stuctured settlement payment rights). In other case I've heard that the "rubber stamp" level of scrutiny applies.

It's a major conflict of interest for structured settlement brokers who set up structures, earn a commission in setting it up to then to succumb to "Sirens" of JG Wentworth et al temptation of a big payout on the back end.I'd hate to be part of any investigation into broker practices who do.

Keep factoring companies out of NSSTA!

Never realized E&O didn't cover that sort of financial advice.

Good article in today's LA Daily journal about factoring company ethics (referenced on Darer's blog)

Still nobody in favor of factoring! Where are you? C'mon you folks makin' money! Out yourselves before you get outted!

There's a great article in the Philadelphia Inquirer from 1/29/2006 in which an attorney just excoriates JG Wentworth

Curt,

If you have a link to it, please post it. If not i'll go looking for it. I'd like to see what they have to say.