It’s time to set the record straight on poaching. It’s a difficult topic to broach because nobody wants to criticize something that gets annuitants more money.  I have always advocated for annuitants; however, increased payouts need to come from ethical and sustainable business practices.  Poaching is neither.   If you’re not familiar with the term, poaching is the search of court records to steal a competitor’s pending factoring transaction.  It doesn’t matter if they take over the transaction entirely or simply act as a “negotiator”, it’s still the theft of a competitor’s work product.

Poachers spin the narrative that their actions are justified because they find and fix egregious transactions.  I’d be inclined to agree if that’s all they did; however, the reality these days is there are far fewer truly predatory deals than poachers want you to believe.  What these poachers and their advocates aren’t telling you is that they usually just prey upon the everyday marketing and staffing costs of the originating factoring company; expenses they don’t undertake. 
The “cash now” business model requires extensive advertising to annuitants directly through TV ads, SEO, social media marketing and Google Ads.  They’re all expensive.  Add to that the cost of the telemarketing staff required to field all the inquiries, few of which go anywhere.  The cumulative cost to simply get one case onto a court docket is considerable.  That’s when poachers pounce.  They have this entire investment handed to them for free with an online legal database, and with no costs to recover, poachers can easily offer annuitants more money and still make solid profits.  They’re not Robin Hoods; they’re just parasites gaming the system under the guise of altruism.

You don’t need an Ivy League MBA to realize that poaching can’t last.  Ultimately, somebody must invest the funds to get a case to where poachers can steal it, and with every stolen file driving up the originating company’s costs, it becomes a vicious circle that’s not sustainable.  The entire factoring industry will go into a tailspin if poaching continues unabated.  Unfortunately, the last ones standing will be these parasitic poachers; something you absolutely don’t want for your clients.  They are truly the bottom feeders of an industry where the ethics bar isn’t set too high to start with. 

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You might remember some time ago the open question posed to the industry: Why is Berkshire still a NSSTA member?  That question really teased out a larger issue that apparently prompted dozens of pages be written and dedicated to twisting and framing into far more acceptable, more marketablelanguage.  Here’s some blunt, honest talk to fill in all the gaps in such smiley bend-over talk.

Did you know that it’s apparently acceptable for insurers to factor their own annuities, but not another’s?  One’s OK because it’s called “servicing” whereas the other is called “factoring.”  In other words, when someone else makes money, it’s “factoring,” which is bad for the client, but if the insurer makes the money, then it’s “servicing,” which is good for the client.  This is merely poorly-veiled marketing-speak for insurers preferring to make money themselves in as many areas as possible, squeezing out as many competitors as possible.  Giants have mighty appetites, after all.

The idea that insurers factoring their own annuities is somehow good for the annuitants themselves is a Robin Hood story; just as fictitious as the fairy tale.  Many of you are opposed to factoring on principle, but argue that if the annuitant gets more money in the end, then hey, who cares if it’s the insurance company doing it?  This approach is problematic because it simply doesn’t account for all the facts.

Insurance companies that factor their own annuities aren’t providing a service, they’ve got the proverbial golden ticket: the names, addresses, and payment details of every annuitant which, lest this be lost in translation, is a salesman’s goldmine.  You can mine your list for as long as you keep putting structures together.  But again, how’s that a bad thing, even from a business perspective?  How is that damning?  Because it’s a blatant conflict of interest for insurers.

Structures are put together in a careful way, with insurers as legally specified gatekeepers to factoring transactions.  They are the second line of defense, behind the Courts, to securing a factoring transaction based on an annuitant’s demonstrative need, not simply desire, for structured funds.  How are insurers, in their gatekeeping function, supposed to adequately gatekeep against their own profit motives?  Are insurers going to object against making more money for themselves?  Of course not.

Some may claim that no profit is made off these transactions.  That’s silly to the point of foolish.  No service line or product from any insurance company exists to not turn profit.  As for measuring this profit, don’t look exclusively at the red or black numbers at the bottom of the sheet, but instead consider this:  insurers get tax breaks for making secure, guaranteed payments to underwrite structured settlements, the same structures that they’re going to now purchase, at a discount, and still enjoy the tax breaks despite not paying out to injured parties anymore, thus enjoying huge profits.  Beyond this simple rehash of how providing services actually does make money, there’s something more problematic at work: optics.

Structure brokers need attorneys to work with them to put these things together.  Attorneys already have qualms with the mere existence of factoring, so that many won’t advise structures for their clients, the would-be annuitants.  How does it look to these attorneys, then, for insurance companies – supposed benevolent gatekeepers – to have everything they need, that glorious golden ticket, to relentlessly market to their clients?  Not so good.

Don’t believe any of this is happening, or that it’s just a twist on the benevolent intentions of your favorite insurer?  Look at those who already do it:  Visit Symetra’s website (symetra.com/clearscape) to see how unabashedly they sell factoring by marketing their familiarity as the insurance company and the ease of having all the required paperwork already.  Allstate, too, has an ongoing factoring entity.  Still others are taking it a bit slower, rolling into ‘test markets’ before unleashing themselves nation-wide, napkin and cutlery ready.  The list goes on.

Insurers aren’t white knights bludgeoning the evil factoring industry; they’re foxes guarding the henhouse, gatekeeping be damned.  Don’t like this new development?  Speak up; stand up and object.  Otherwise, you should remind annuitants to say ‘thank you’ while you assist them in bending over.

Fire and brimstone aside, we do have an industry-wide solution that can satisfy most, if not all parties.  It just requires us all to be on the same page before we get there.  The article is forthcoming.

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Bentzen Financial is pleased to announce that W. Campbell Mears, CPA, CSSC has joined the company, effective July 2, 2018.  Bentzen Financial has worked tirelessly to become the beacon of ethics in an otherwise controversial market-space.  It’s rare to encounter someone with the level of integrity Mr. Mears demonstrates, so adding him to the company simply made sense.

Mr. Mears brings 25 years of structured settlement experience to the company.  He has held senior positions at leading firms in the insurance industry, including AIG, Cambridge Galaher Settlements, and Crowe Paradis Services Corporation, and he was co-founder and CEO of StructureOnline, a provider of Internet-based structured settlement management systems.  In 2010, he joined the factoring industry.  His significant experience and expertise will help serve structured settlement annuitants whose financial needs have changed post-settlement and will greatly enhance Bentzen Financial’s unique capabilities.
 
“I’m excited to join Bentzen Financial because Rhonda and the team share my strong beliefs about factoring,” said Mears. “Structured settlements are meant to protect people affected by injury, but the needs anticipated at the time of settlement can change as life goes on. Factoring is a valuable tool to address these situations, but it must be provided as a consultative service that helps annuitants balance current and future needs.  Factoring should be done with the same care, attention, and expertise that is used to put structured settlements together.”

Mr. Mears holds a BA from Wesleyan University in Middletown, CT and is a Certified Public Accountant. He earned his Certified Structured Settlement Consultant designation from the National Structured Settlement Trade Association (NSSTA) at the University of Notre Dame.  He is former co-chair of the NSSTA Marketing and Technology Committees.

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Berkshire, like Symetra and Allstate before it, has entered the factoring game. Unlike Symetra and Allstate, though, who jumped in all at once, Berkshire has opted for the slow creep. There is no difference between these players other than the way they’ve entered. The end game is the same. So why does Berkshire get a pass?

For the past couple of years Berkshire has acted primarily as a gatekeeper for annuitants seeking cash now providers. There’s no problem with that, and it’s certainly their prerogative, but last year they dipped their toe into the factoring waters of Texas as a special test market. Fast forward and they’re doing the same in a few other states. Really, it’s merely a matter of time until Berkshire is nationwide like the other insurance companies before them. I firmly believe this is a problem for one crucial reason: it’s a strong conflict of interest.

This conflict of interest centers around the fact that as the historical gatekeeper, it has a list of annuitants (read: customers), ready to go. This is the holy grail of any would-be player in the industry. Who doesn’t want a free list of people ready to go? Moreover, they’re not just prospective customers in some potential, hypothetical sales district, they’re existing customers, who aren’t protected by traditional consumer protections such as the TCPA because of their ‘existing customer’ status. In other words: they can, and likely will be contacted for ‘additional services’ when it’s nothing more than a veiled sales pitch from someone who already has their business in the first place. It looks like Berkshire is slowly but surely having their cake and eating it too.

I have always abhorred the factoring industry’s scouring of court records for profit.  It’s a perversion of the intent of open court records.  These firms search for past factoring transactions as well as every personal injury suit that may have settled with a structure.  Combined with sophisticated skip-tracing tools, today’s legal databases allow factoring companies to compile massive lists of potential sellers.  It wouldn’t be such an issue if they just sent annoying junk mail like the mortgage and real estate companies who also scour public records.  Instead, they also bombard annuitants with unending phone calls, stalking on social media and even in-person sales visits.  Worse yet, the factoring industry uses these records to purposely target the poor and unsophisticated with endless temptations of “cash now”.  The Baltimore lead paint scandal targeting cognitively challenged inner city annuitants is my case in point.  Then there are the horrific number of cases where court records are used to coerce annuitants into multiple transactions until they are penniless and destitute.

Fifteen years in the factoring business has shown me that most of the egregious behavior can be directly tied to court record scraping.  It’s been an issue since I started in this business in 2002, however, the increased sophistication of online databases in recent years has compounded the scraping problem exponentially.  Today, these searches are cheap, easy and profitable. Curtailing online access could completely change the cost-benefit rationale.  The added work and complexity of using court runners would drive up costs, making scraping far less lucrative.  More importantly, it could drive the worst actors out of the business altogether: the small, scamming, castoffs of the big firms whose entire business model revolves around online record searches combined with unending, coercive sales calls.

Despite the recent reports of factoring industry shenanigans, the search engine companies still seem to turn a blind eye. I can’t say for certain which services the factoring industry uses since I don’t engage in court record scraping, but I can state that Westlaw has been a premier sponsor of NASP’s annual meeting for years. I reviewed the terms of service for some the larger legal search firms and found the following related to commercial use:


 

LexisNexis

You and your Authorized Users (defined below in Section 2.1) are granted a nonexclusive, nontransferable, limited right to access and use for research purposes the Online Services and Materials made available to you. 

Bloomberg

You may not use the Service for any illegal purpose, for the facilitation of the violation of any law or regulation, or in any manner inconsistent with the TOS. You agree to use the Service solely for your own noncommercial use and benefit, and not for resale or other transfer or disposition to, or use by or for the benefit of, any other person or entity. 

Westlaw

you will not use, intentionally or unintentionally any of the content, information, or services on this website in a manner contrary to or in violation of any applicable international, national, federal, state, or local law, rule, or regulation having the force of law.

… you will not reproduce, duplicate, copy, download, store, further transmit, disseminate, transfer, or otherwise exploit this website, or any portion hereof without Thomson Reuters’ prior written consent…


 

The above excerpts seem to suggest that these firms are concerned with the legal, non-commercial and ethical use of their services.  That said, the ones that do allow factoring industry access clearly don’t seem too concerned with enforcement.  Regarding legal use, the reality is that the information scraped from these databases is used to continually violate the Telephone Consumer Protection Act (TCPA) with incessant calls to annuitants.  Our survey of past clients confirmed the never-ending calls and the industry’s refusal to follow the law by not honoring do-not-call requests.  For some, it was so bad that they no longer answered their phones and couple even changed phone numbers, to no avail.  Rampant industry violation of the TCPA is also suggested by an ongoing potential class action suit against a large NASP-affiliated firm for their alleged failure to honor do-not-call requests.  When it comes to derivative works violations, I have also seen several Craigslist ads offering the contact information for thousands of annuitants, all likely gleaned from these court record services.

Court record scraping has been a longstanding issue that seems to be getting worse by the day as more factoring companies become increasingly aggressive and underhanded in their pursuit of unsuspecting annuitants.  Ideally, some regulations restricting the commercial use of court records would be more beneficial to annuitants, but I don’t see that happening.  However, anything that can be done to limit the ease of access can’t hurt.  The question becomes, how does one get these legal database firms to actually enforce their terms of service?

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Have you been approached by a factoring company to sell your client list?  There is no denying that it has value and I assume that they’ll pay handsomely to get their hands on it.  To them, your list is guaranteed fresh meat.  That’s a welcome change to their usual court scraping endeavors, where the status quo involves daily battles with the numerous other hyenas circling the same carcasses.  These similes may seem overly dramatic; however, I’ve been in this business 15 years and naively worked for a couple of these firms early on, so I can definitively state that they’re entirely accurate.  It’s all about the hunt, the kill, and the feasting, not about integrity and compassion.


I can also categorically state that you can’t trust these people regardless of contracts and non-disclosure agreements.  I know first-hand that neither promise or contract mean anything to them.  They are smooth, fast-talking snake oil salesmen who will tell you what you want to hear but rarely deliver on those promises and guarantees.  After all, these sleazy “cash now” hucksters are the ones who routinely deceive, harass and coerce annuitants through every unethical scheme imaginable.  It’s a stretch to believe that they will treat you with any more integrity.

You also need to know that factoring is a small, competitive and downright vindictive industry.  You have no way of controlling how widely your name will be disseminated within the organization.  Partners and employees are forever parting and forming new firms, usually with great animosity.  There is so much bad blood between most firms that they routinely rat each other out to colleagues and industry bloggers.  That’s how I was made aware of one broker who sold a list.  I don’t intend to gossip but it’s only a matter of time until this tidbit of news crosses over to the primary side, if it hasn’t done so already.  

Furthermore, regardless of promises to the contrary, I guarantee that these factoring companies will hound your unwitting clients to the ends of the earth to get a return on their investment.  Your clients will not simply receive harmless mailers extolling the services they offer, but instead, they will be marketed the same way they do annuitants scraped from court records: with incessant phone calls in violation of the Telephone Consumer Protection Act (TCPA), stalking on social media, or worse, sales reps at their front doors.  One big “cash now” firm is currently being sued for alleged TCPA violations, with a pending motion before the court to compel client lists and phone records.  Confidentiality agreements offer little protection in deposition, so what happens if the purchasing company gets sued for TCPA violations, or worse, for the victimization of vulnerable annuitants like the Baltimore lead paint fiasco?  Either way, there’s a chance that your name could become public record if plaintiff’s counsel digs into the firm’s annuitant prospecting methods. 

There is no denying that easy money can be made by capitalizing on the hard work you’ve already done, but if ever there was a time to be cautious of the people you do business with, this is it.  Ultimately, is it worth the risk to your reputation, let alone the harm and aggravation to your clients?

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In recent years there has been a proliferation of secondary market firms touting higher yields through either individual payment streams or trusts backed by factored payment rights.  However, in light of recent developments, I strongly advise caution and due diligence.  This is no indictment of any secondary market seller, but a warning of what may lie ahead in this market.  My concern is that some of these secondary market trusts may be sitting on ticking time bombs of potentially toxic assets.  I believe that the following longstanding and unethical business practices in the factoring industry may finally come home to roost:

Forum shopping – This has been a rampant problem where factoring companies will fake the residency of an annuitant in a rubber stamp jurisdiction to get a transfer approved easily.  The motive is either that the proper jurisdiction is particularly difficult to get any case approved, or that much higher profits can be made in jurisdictions with little oversight.

Coercion – Unethical factoring companies are notorious for pressuring at-risk annuitants into unwarranted transactions.  These annuitants have no business selling payments so the factoring companies lie to the Court to get the transfer approved.  A perfect example is the recent Baltimore lead paint fiasco, where cognitively impaired annuitants were manipulated into predatory discount rate transactions, complete with bogus independent professional advice.

Fraud – Likely not as common but factoring firms have been known to forge documents.  A NASP firm was recently sued for forging an annuitant’s signature on lottery transfer documents and I am aware of another pending case alleging forged signatures by two NASP firms buying structured settlement payments.

In total, the number of questionably sourced transactions falling into the above categories is quite considerable.  The common denominator is that all these transactions constitute fraud committed upon the Court.  Consequently, we are now starting to see suits being brought to vacate some of these deceitfully obtained court orders.  When orders are vacated, the purchased payments revert back to the annuitant, potentially leaving the investor holding the bag.

For these secondary market firms, the security of the factored payments they buy is only as good as the ethics of the factoring companies with which they do business.  Compounding the risk is the fact that secondary market firms typically buy from smaller producers since the larger firms usually have institutional investors.  The exposure lies in the fact that many of these smaller firms are scamming, unethical, fly-by-night court record scrapers who, just like Access Funding in the wake of the Baltimore investigations, will simply close up shop if they get caught, leaving few to no assets to go after.  Ultimately, how many vacated orders can these trusts absorb before they’re in serious trouble?

That leaves the question of how bad the fallout will be from vacated orders.  It will depend on what transpires with the Baltimore situation and whether the plaintiff bar truly takes notice.  There have only been a handful of suits to date, so how it all shakes out is anyone’s guess.  It could be minor, but it could also be game changing. That’s why I’m suggesting caution.  If you’re considering a trust product, I recommend waiting until the dust settles unless you can be assured that they have contingencies in place to cover potential losses.  If you’re considering the purchase of individual payment streams, there are other firms who do factoring transactions by the book, like us.  You simply need to ask where the transaction was sourced and do some research.  An upcoming article may help you sort the wheat from the chaff when it comes to reputable factoring companies.  In the interim, feel free to call us with any questions.

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Previous posts have gone in-depth into the means that some companies use to go after annuitants, but scant attention has been paid to what the annuitants themselves have to say.  As you can imagine, few have many nice things to contribute given the lengths that are taken to try and extract money out of them.  They generally feel angry, bitter, and helpless.

Frequently, annuitants who have provided testimonials ask: “Why don’t they stop contacting me?” especially since every single one of them has demanded contact stop.  Some know that the harassment is illegal and approach it in this way: “Why do they break the law?” they ask; just for potential profit?  “Do they not know what we/I have gone through?”  Others aren’t aware of the illegality of it, but still get the feeling that something’s wrong.  They know they shouldn’t feel harassed and want contact to cease – they just aren’t aware of how to do it or why it started to begin with.  We in the industry do know why; we know it simply comes down to money, and we know it started because they aren’t perceived as victims who are being further victimized by constant and unwanted contact, but clients who contribute to the bottom line.  In other words, these people have been reduced to profit margins.  But why does this matter?  Businesses must turn a profit – and of course, no one disagrees with this, not even the annuitants.  One annuitant who provided a testimonial, a salesman himself, commented (at length) that the tactics are – using a creative use of expletives – ultimately amateurish.  He dealt with the harassment by threatening, consistently, to sue the offending companies.  Thankfully, he was left alone after resorting to this tactic, though it is unfortunate that he had to resort to it in the first place.  Anyone who must resort to illegitimate means for their profits clearly isn’t secure enough in their legitimate business to play fair.

Listed below are a variety select quotes from annuitants that raise important issues in and of themselves.  Beyond the singular quote listed, please note that these experiences are far from unique.  Nearly all of the annuitants that spoke echoed similar feelings.

  • “We’ve gotten to the point, if a woman says ‘no’ it means ‘no.’  When a customer means ‘no’, it means ‘no.’  I keep saying ‘no’, so it means ‘no.’  These companies should lay off.  I shouldn’t have to defend himself after I say no.  I shouldn’t be constantly harassed.”
  • “It’s like they don’t even do their research; they just keep calling and calling and won’t leave you alone.  There’s not even any money left!  They just don’t let up, even when there’s nothing left.”
  • “Basically, once I’ve asked these people to stop calling… it should be something that’s honored.  They shouldn’t keep calling.  But they don’t.  Thirty days roll around, oftentimes, and the same people call.  It should stop the moment I say I doesn’t want the phone calls and services.  Checks in the mail could really hurt me if I didn’t shred all the checks I gets per day.  This is already hard because I’m disabled.  I doesn’t see why this should be public knowledge…”
  • “It’s very annoying.  It’s very frustrating to get these calls ALL THE TIME.  I’ve also got a cell phone, and they suck up my minutes constantly.   I just ignores Florida calls now.”
  • “If [Congress] can pass a law to keep this from happening, this is great.  It shouldn’t be public record to begin with.  This is a private matter and companies shouldn’t keep calling; they should respect that if you didn’t choose their company they should bow out gracefully.”
  • “It’s a case of privacy… and it’s completely stolen.  They know everything.  They know the financial records.  It’s wrong.  I’m constantly harassed and they think it’s their right to come and get my money from me.  They just don’t take no for an answer.”

These stories go on and on, but for sake of brevity, we’ll cut them off there.  There are a few other stories that aren’t quotable due to the highly emotional – and therefore somewhat difficult to transcribe – nature of the conversations, but here are summaries of two:

An annuitant’s father, the primary caregiver for an otherwise troubled son, and the annuitant’s sister, both receive contact on the annuitant’s behalf.  On two occasions this went above and beyond the typical means.  For the father, an entire packet of information was taped to the front door of his home when he wouldn’t answer the door.  For the sister, a medical professional, a representative went to her place of business to get a hold of her, and through her, the annuitant.  The family’s response to this unwanted contact was unanimous dismay and disbelief; they didn’t anticipate that level of harassment.

Another annuitant, partially disabled in mind and body as a result of the incident which resulted in her structured settlement, receives calls around each meal of the day.  Answering every phone call is difficult due to her disabilities, and having to go and answer the phone so frequently, dreading that it may just be another unwanted call, is overwhelming.  It’s a constant stress and source of anxiety which negatively affects her more than the average person as a result of the existing neurological disabilities.  Each phone call and subsequent argument to stop causes stress that she not only shouldn’t have to deal with, but can’t.  She, like so many others, desperately try to screen calls to try and prevent the endless stream of contact.  There is no good reason why this annuitant, her family, or any others should have to be subjected to this torment.

So what can we, as an industry, do about it?  What should we do about it?  This will be examined in detail in the next post.

As noted in our preliminary findings report, the original intent of the investigation was purely to look into harassing phone calls; it was too limited in scope and therefore the investigation was adjusted appropriately.  Annuitants’ testimonials are clear: they believe they are being ruthlessly and systematically being targeted for someone else’s profit.  But how are these people being reached?  What makes contact harassment?  Let’s explore this in more depth.  All clients and companies exposed by these clients have been made anonymous for these posts.

The standard and most frequent forms of contact are direct mailings and phone calls.  For many, though not all, direct mailings are the most annoying simply due to the volume of mail received on a weekly basis; for those annuitants who have only just left the courtrooms the mailings are on a daily basis for months on end.  These mailings are the “Gotcha!” checks that look and are occasionally perceived as free money.  We in the industry know this isn’t the case, and our company has taken steps to warn annuitants to be careful with these mailings – but as previously mentioned, some annuitants don’t understand this.  Some, either due to misunderstanding the mail or out of sheer desperation, will cash these checks.  The results for these people are disastrous; not just in terms of getting money or expecting to receive more afterwards – even when they don’t end up getting any at all – but psychologically.  We work in the industry and understand all of the jargon; many of these annuitants – these people – don’t.  The mailings, despite being effective sales tools, are too much for many annuitants.  Beyond the harmful effects for those who end up cashing in the checks they’re getting in the mail, from a practical standpoint they are largely ineffective.  Nearly all testimonials from clients note that whenever they see mail that seems like it might be about a structured settlement or annuity, they simply make a bee-line for the garbage can and toss it in.  It seems about as effective as the political mailings we are all being inundated with during the mid-term election season.

Phone calls are troublesome territory for annuitants.  For many, they take the appropriate approach to unwanted solicitations and request to be removed from the calling list for the respective company.  At this point, the Telephone Consumer Protection Act is clear that the person shouldn’t be contacted again for at least a period of five years.  Do the phone calls stop?  For the vast majority of the time, absolutely not.  Testimonials frequently cite that despite repeatedly telling companies to stop calling, they do anyway.  The salesman might change, but the companies don’t.  This is textbook corporate harassment.  If this wasn’t troublesome enough, clients have gone on at length regarding the kinds of tactics employed by these various representatives.  This ranges from a typical sales pitch of feigned familiarity and friendliness to shouting that they’re being ripped off and should do business with them.  For the friendlier pitch, one client testified that she repeatedly received a call from a man at company X.  He was told not to call back and respected this for about a month.  The next month he called and claimed that when they had spoken the month prior he was given an indication that she may be interested in their company’s services.  She explained that this wasn’t the case and to stop calling, that she wasn’t interested in selling her annuity to them.  Calls of this type occurred once a month for several months until the representative finally stopped.  Despite the friendliness of these solicitations, it must be remembered that it is still harassment since she repeatedly told this person, and the company he represented, that contact was not desired.  Beyond the legality of the situation, it is simply unethical and has effects beyond the immediate offender.  If our industry continues with these practices then it is our entire industry that will ultimately suffer, and it begins with those that continue to conduct themselves exclusively in legitimate business practices.  Here is another example, far less friendly, than the first:  another annuitant, one from years past, still to this day receives calls and mail.  When he does receive calls, he states that many of the sales reps are “borderline belligerent” and just won’t get off the phone.  He has resorted to threats of suing them for harassment since they have kept calling for so long.  These sorts of measures should not have to be taken by any annuitant anywhere.  This same annuitant went on at length about how “no means no” and that he isn’t in the habit of changing his mind, no matter how much harassment he suffers as a result.  We at Bentzen Financial agree.  No does mean no.

Other tactics reported to us include the following, which we have come to expect as standard fare per testimonial:

  • Forcefully coercive tactics, misinformation included.  This includes pretending to be a representative of our own company to set the annuitant at ease before claiming that no, in fact the person is from another company and apologizes for the (consistent) misunderstanding.
  • Contacting with equal vigor the family of the annuitant; minors and out-of-state relatives included.  Some, especially children, more apt than others to be fooled by the “Gotcha!” checks.
  • Contacting the legal representatives of annuitants to the point of harassment as well.
  • Claims that Bentzen Financial is ripping annuitant off, and therefore the soliciting salesman’s company should naturally be selected as replacement, despite contractual obligations with us.
  • Physically showing up at an annuitant’s, annuitant’s family member’s, or annuitant’s legal representative’s home or place of business with an aggressive, in-person sales pitch.
  • Using dialing machines and automated messages to contact annuitants despite not being legally permitted; the indicated use of dialing machines is based upon time lags during the answering of phone calls.
  • Even if the annuitant does business with a company, which is to say that he or she gave in to the constant contact, the contact doesn’t stop – not even from the company that he or she gave in to.  This includes annuitants who don’t even have any money left to do business with.  Harassment continues despite this logical disconnect.

The standard fare is unacceptable and unfair not just to the annuitants, but to the businesses that are not otherwise engaged in these practices.  How is legitimate business expected to flourish if such a practice like scraping is allowed to continue?  The short answer is that it can’t.  The only logical conclusion is that if one is to try and compete with the dark side, one must join it.  Thus we come to a case mentioned in the preliminary findings report: where an annuitant was harassed not just by phone and mail, but also directly from a representative on Facebook.

This is easily one of the most astounding cases that we have come across.  Her testimony is standard, otherwise: constant mailings and phone calls.  Representatives are told to leave her alone but they refuse to do so; warnings and demands to stop are frequent.  The most persistent representative admitted to searching through all of Facebook for the annuitant by last name until he found her.  He then attempted his pitch again.  The annuitant was so disturbed by this man’s refusal to take the hint that she took a photo of her desktop, including the Facebook message, and forwarded it to us – after promptly refusing him once again.  The representative, the company he worked for, and the contents of the message were plain to see without any attempt at veiling it.  So brazen was this particular attempt that it is difficult to do this story justice without attaching the picture submitted to us; for privacy reasons, however, this is withheld.

These are the tactics employed by the scraping pariahs of our industry.  Part two of these investigation results will be released soon and will delve into what the annuitants themselves have to say about their experiences; what they think, feel, and want to see happen in the industry given their experiences.  Check back soon.

Bentzen Financial has, for some time now, received reports from former annuitants that have done business with us that they feel they are being harassed by others in the industry.  Once the liquidation of their structured settlements or annuities are approved, annuitants are immediately contacted to try and squeeze more business out of them – at least, with regards to factoring.  Unfortunately this also occurs once an annuitant has put together a structured settlement.  This is the scraping phenomenon that has overrun the entire industry.  Due to the reports of harassment of our former clients, we felt it necessary to conduct a formal investigation.  To that end, we have tasked an independent academic to conduct the investigation and produce a report of findings.  Preliminary findings have been produced and already further serve to demonstrate the deleterious effect that scraping has on the industry.

The original focus of the investigation was specifically on harassing phone calls, but after speaking with many on (just!) the Bentzen Financial client list, it seems as though this was too limited in scope.  Nearly every annuitant who has completed a testimonial reports the extraordinary degrees that several companies in the industry – several names come up constantly – have gone to try and secure their business.  Representatives of these companies are frequently referred to as “sharks,” “vultures,” and “predators” of one kind or another.  It is clear that the annuitants feel as though they are being further victimized by unscrupulous businesses with unethical practices, commonly asking why these solicitations don’t stop despite repeated confrontations and, in some cases, pleadings.

Many of these annuitants note that there tends to be a time lag between when they pick up the phone and when a person on the other line responds; this is typically indicative of the use of auto-dialing machines which are strictly regulated by the Telephone Consumer Protection Act (1991).  Calls to cell phones, for example, are strictly prohibited – and are frequently done anyway.  More troublesome, however, is the fact that all affected annuitants report telling solicitors to stop calling – and none complied for the mandatory five (5) years as stipulated by the TCPA.  Adding insult to injury, the solicitors often do not identify themselves or their organizations, preferring to rely upon salesman tricks and faux friendliness, with some even going so far as to state or imply that they work for Bentzen Financial.  There are numerous reports of overreach, such as by relentlessly contacting spouses, children, and other relatives using whatever means possible.  Unfortunately this is just the tip of the proverbial iceberg; some reports include harassment by salesmen on Facebook, misleading sellers into believing they represent another company that may have a better working relationship with them, or even going to their homes and places of business seeking them and their families in person.  The general consensus is that annuitants should not be contacted by anyone they have not sought out themselves.  Even companies that have done business with annuitants in the past are often reported as carrying out harassment after initial business is concluded.  This is how the industry’s reputation takes a hit: even those companies whom clients decided to deal with are engaging in actions that many annuitants feel as though are predatory.

A final and consistent complaint that annuitants report is that the sheer amount and frequency of direct mailings with “Gotcha!” checks being sent to them is overwhelming.  While most annuitants know that these checks are essentially traps for companies to try and get more money out of them, some lack sufficient understanding of how the industry works and get caught up in what seems like a blessing of free money.  There is no free money and there is no such thing as a free lunch.  It is simply unacceptable that some annuitants, many of whom are struggling financially, are further victimized in this manner – be it due to their own ignorance or desperation.

The preliminary findings do not paint the industry in a positive light.  Scraping, now associated with harassment, is dangerous to the industry and legitimate business.  For the industry to survive and flourish it cannot continue such an unethical practice.  The complete report is being put together.  Its findings will be noted in a future post.