The structured settlement secondary market is being regulated for, let’s face it, internal industry corruption.  Greed has rendered it utterly toxic, and now Washington wants to get involved.  Can you blame them, though in this post lead paint exposé environment?  The Maryland reforms, many of which are spreading past the state, deal at length with the issue of forum shopping and factoring transparency.  What some may laud as truly tough new regulation isn’t particularly impressive, though.  The reason for this is simple: it fails to address the core problems within the industry: scraping and ruthless aggression in the generation and pursuit of sales leads.

Many were shocked and saddened by the idea that a bunch of Maryland lead paint victims could so strategically be targeted by factoring companies.  The process of going through a factoring transaction was specifically examined by regulators for reform.  That’s a fine start, as noted earlier – but why haven’t regulators bothered to ask the question how certain people are being targeted so exactly, with such efficiency.  Scraping!

We know we sound like broken records, but scraping is the heart and life blood within the dark underbelly of this issue.  How do these companies know who to target?  They get a hold of the records.  How do they get a hold of the records?  By using court scraping or court runner services.  Who provides such services?  West Law, among others.  These venerable lawyer resources are at the forefront of profit-making for the factoring industry.  Using these services for client-lead generation has become the norm, however, and are typically against service terms of use.  If not market leads being generated by court sleuthing by dedicated hires within the factoring companies, leads can instead be purchased either alone or in pre-compiled lists by court runners and other scrapers.

Legislators & Regulators: if you want to protect annuitants, you need to protect their privacy.  Simply adding a few transparency measures into existing regulations won’t cut it.  If you want predatory behavior to stop, you must remove the predators’ teeth and claws.  Strengthen consumer protections and enhance annuitant record privacy.

Brokers & Annuitants:  Don’t be fooled into thinking that this is it.  It’s far from over.  Know the ethical partners worth doing business with.  Bentzen Financial doesn’t scrape or gnash its teeth in preparation for a juicy sales kill.  We are referral based because it’s the right way to do business, and don’t buy our endorsements like some of our competitors.

If you want straight talk, you want Bentzen Financial.

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.

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.