Advertising: how businesses spread the word about the products and services they offer in the hopes of gaining customers.  It ranges from cheap word-of-mouth referrals to massive, expensive, mass-media campaigns on TV, radio, the Internet, and more.  For factoring companies, this isn’t as simple as Burger King showing us a juicy new burger from various angles.  It’s a matter of stimulating the need for cash. NOW.

We see it in the most popular advertising online: the brilliantly jingled 877-CASH NOW commercials that ran on TV and radio, featuring opera.  It was catchy, pertinent, and funny to the point of absurd; in other words, you remembered it.  For all factoring needs, JG Wentworth would burst through your skull with dramatic, operatic flair.  For structure brokers, this has been an oft-noted irritant post-structure.  Those brokers willing to provide referrals regarding which factoring companies they’d recommend for quotes are simply thrown out the window in favor of the direct-to-consumer advertising campaigns of Wentworth and other giants; mostly because the brokers themselves aren’t being contacted anymore for their input.  Is this fair?  For big factoring companies, certainly; they have the capital to advertise, so why not take advantage of it?  But what are the downsides for brokers and annuitants?  These are two-fold:

1.)    Advertising is expensive.  But more than this, keeping staff on hand to handle the influx of inquiries as a result of such expensive advertising is also expensive.  This cost cannot be easily absorbed by the corporation and must naturally flow to the consumer; in the case of factoring companies – the annuitants.  This results in annuitants getting lower rates of return on their factoring transactions.

2.)    It cuts out structure brokers.  By appealing directly to potential customers, advertising by Wentworth and other companies has severely impacted the professional and referral importance of structured settlement brokers.  Annuitants no longer have a need to contact their brokers or attorneys, in many cases, since they already know who to call if they’re in need (or tempted by) cash now advertising.  This distances annuitants from those who know best if factoring a transaction is wise or necessary: the brokers themselves.

So, what can be done to address these issues?

1.)    Know who doesn’t conduct mass advertising directly to annuitants.  Those who aren’t playing the expensive advertising game aren’t going to pass on costly inflated rates which ultimately short-change the annuitants.  Annuitants who decide to factor their structures are going to do so if their minds are made up – wouldn’t it be better for them to get the best rates possible?  Annuitants just need to be given the opportunity to speak with someone who knows where to turn beyond what they may see on TV.  They should be speaking to their brokers again; and these brokers should be referring to smaller, specialty factoring companies.

2.)    Direct-to-consumer advertising is a fact of life in every business, but this shouldn’t necessarily be one of them.  Brokers know the ins and outs of this business far better than annuitants, especially given that it was the broker who put together the structure to begin with.  Wouldn’t it be nice to be involved in the process of potentially taking them apart?  It may not even be the best thing for an annuitant to do!  Brokers input is important.  Stay involved beyond the structure.  Let annuitants know to contact you before jumping on the cash now bandwagon they see and hear on TV, and refer them to a trusted business with a record of good rates and ethical practices.

There’s no question that having transparency in government is a good thing.  Access to public records for the purpose of assuring that government is not engaged in immoral, unethical, and illegal activities is a given in this country.  What is not a given, however, is the use of public records for purposes other than the watchdog function.  For an in-depth look into the privacy side of this issue, visit: https://www.privacyrights.org/ar/onlinepubrecs.htm.

When individuals or companies use access to public records for their own gain, particularly when the goal is to profit from personal identification information (PII), it is a moral, ethical, and legal quagmire.  If such information ultimately leads to stalking, it is blatantly illegal.  For purely research?  Perfectly fine.  But what about greed?  A short cut for profits?  This is a shaky ground for legality.  On the one hand, the spirit of the law indicates that court record availability is a matter of government transparency.  This transparency is considered desirable in government to make sure it is not violating anyone’s rights.  On the other hand, transparency is not meant to permit or enable otherwise illicit activities, such as identify theft, or harassment per stipulations of the Telephone Consumer Protection Act (TCPA).  But does it permit PII to be used for sales purposes?  This is a gray area.

One could argue that any research of court records that includes PII naturally leads to the potential of sales; it’s hard to argue the potentiality of this argument.  The primary issue, though, is not whether such information could be used, as it’s quite obvious that it could, but whether it will be used.  This is determined by motive.  In other words, what motivations would a person or company have to obtain records containing the PII?  Given the natural profit motive of free enterprise, the most logical and common response would be because it’ll ultimately result in the company making money.  But is the company making money because it’s using the PII explicitly?  Or is it merely selling or trading this information?  Which is okay?  Are either of those options okay?

If sales are going to be conducted by phone, and a reasonable person could conclude that the person on the receiving end of the phone call does not want to be bothered, then the call itself is a violation of the aforementioned TCPA.  This is not okay, simply on the basis of legality.  Beyond legality, there’s a sniff test akin to the golden rule.  Suppose you were on the receiving end of a solicitation that directly resulted from someone getting your PII from a court record.  How do you react to the solicitation?  Are you hostile?  Are you okay with the idea that you will likely receive countless more phone calls as a new norm, even after demanding to be left alone?  If your answer is “No!” then consider the effects of court scraping beyond legality and ethics.

Is contact as a result of court scraping a nuisance?  Yes.  Even salesmen engaged in the practice must acknowledge this.  Does it always work?  Of course not.  Salesmen using information gathered by scraping know that it comes down to a numbers game: out of a large number of calls, only a small minority of them may be productive.  That’s just the reality of sales.  The difference between this and more traditional methods, however, is that no one signed up to be on a court scraper list.  Receiving solicitations by this method purely results from creative greed; the Information Age has made acquiring PII quick and cost effective.  For pure cost-benefit it is a natural boon for any company.  The downside is that engaging in such activities makes you loathed.

Recall that using PII for stalking is illegal because stalking itself is a criminal activity.  Would one classify relentless solicitations directly resulting from looking up PII from court records as a form of stalking?  Do these solicitors not obtain information and seek contact without invitation?  E-stalking, or stalking using the Internet, is criminal, much as one would stalk someone physically down the street.

Isn’t court scraping merely a more sophisticated method of e-stalking?

Here’s the only, barely valid excuse heard to date to that question: “Well no, because a person isn’t being solicited to do them harm… just to make money off of them!”  Taking harm as the undesirable result of stalking, we arrive at the final point…  Does the potential financial ruin of annuitants that are coerced into factoring a portion or more of their payment streams constitute harm?  Or must harm be physically inflicted?  One might turn this argument around and say, “But no one is forcing the annuitant into factoring his or her structure!”  That’s certainly true, but there is the matter of how the annuitant is approached.  Did the annuitant, in sound mind and of his or her own volition, seek to do so as a result of unique and pressing circumstances that necessitate factoring a transaction?  Or, did a salesman contact the annuitant and use a sales pitch to make such a transaction, regardless of the annuitant’s circumstances?  The first scenario is perfectly fine; the second is not.  Context in this industry matters a great deal, and as has been said now many times before, ‘selling’ factoring isn’t like selling waffle makers.  This is a life changing financial decision that cannot be taken lightly.  As many annuitants have indicated during the harassment investigation, no one should have their PII when it comes to their financial situation unless they reach out first.  We agree.

Not all those who sleuth court records or retrieve legal documents should fall under scrutiny.  We do not advocate for an end to anyone’s ability to search court records; there are many arenas where this is perfectly appropriate and should be left alone.  We do advocate the censorship of PII for recipients of structured settlement annuities.  In short: leave them alone.

Support annuitant privacy by signing the petition.  Click here to sign.

The following is a review and unveiling of each of the two new sites. Both are part of the same movement we’re starting which we call, collectively, the Ethics Initiative. We’ve always believed that business should be conducted in as clean a manner as possible, and have always striven to do so. We are dismayed at the level of prominence that scraping, in particular, has reached in an industry that doesn’t need the bad press; and more importantly, we’re hoping you’ll join us in trying to clean it up.

FactoringEthics.com is dedicated to the collection and dissemination of information directly pertinent to maintaining cleanliness in the factoring industry. Relevant regulations, statutes, etc. are posted and explained in order to arm anyone who wants to prepare themselves for potential harassment by unscrupulous actors in the factoring industry. For example, brokers and annuitants should be aware of and well versed in the existence and application of the Telephone Consumer Protection Act, which is clear regarding the solicitation of potential clientele by phone-using businesses – and really, what business isn’t using a telephone? Violating the TCPA has clear consequences, but like most things in government, the question isn’t the intent or application of relevant regulation, but the enforceability. Simply put: no one can enforce anything if no one’s reporting wrongdoing. As far as the government is concerned, if there’s no squawking, there’s no problem. It’s time to squawk.

Another aspect of FactoringEthics.com that we’re pleased to announce is an oft-overlooked reality of the industry: there are many aliases in use. At first glance one might say, “Wow, what a competitive marketplace!” Well hold on, just because there are a bunch of different names being thrown out there doesn’t mean they’re competitors. This site will collect and expose all factoring companies and their known aliases. We do not seek to rate any of them nor do we seek to dissuade their use, per se – but we do believe that transparency in the secondary market can only help. There’s no reason that legitimate business will be harmed by exposing these aliases. The notion of “Let the buyer beware!” echoes true here; but with this information in hand, brokers and annuitants can both breathe a little easier knowing who’s-who in a seemingly crowded marketplace.

StopCashCalls.com is dedicated specifically to annuitants and brokers who want to have a more active role in standing against anyone who violates the TCPA. We’re working with an attorney to establish a class-action suit against anyone found to be in violation of the TCPA with an annuitant. If you’re an annuitant and you’ve been receiving constant phone calls and you want them to stop – say no more, sign up and provide a testimonial and you’ll be added to the list of people to contact for reference. Only if you’re comfortable taking the next step by joining in the class-action suit will we share your information with any attorney that the Project is working with. You’ll call the shots. We’ll help get you the tools for your freedom from harassment.

If you, a broker, are tired of hearing, both from your clients and through the grapevine, that yet-another annuitant is being harassed non-stop then we implore you to pick up the phone or open your e-mail client and let us know. Only through cooperation can we put a stop to behavior that shouldn’t even be going on in the first place. Scraping can stop. Harassment can stop. Ethics isn’t just jargon to throw around to generate buzz or get web-clicks. Ethical concerns are as serious as anyone’s bottom line – and our stance is that annuitants shouldn’t be taken advantage of to pad a predator’s bottom line.

We look forward to contact and cooperation for the Ethics Initiative as we get the ball rolling.