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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