Annuitants & Factoring Questions: How to Tell They're Coming
April 12, 2021

Since the Society of Settlement Planners (SSP) Annual meeting, we’ve had some inquiries into how to help annuitants avoid getting taken advantage of by the “Cash Now!” factoring companies. First, we need to establish the reality we’re all dealing with here:

  • Annuitants are exposed to the existence of factoring through TV, radio, and Internet ads, as well as direct solicitation. The allure of “Cash now!” is misleading but promises to solve people’s financial problems. A transaction will happen.
  • The Cash Now companies do not offer informed consultation or have any concern for the annuitant’s situation. Their business is simply to buy as many annuity payments as they can, using whatever means possible to get that business, no matter how misleading or ethically questionable.
  • As part of a factoring transaction, annuitants must provide copies of their structured settlement documents. This is where you come in.

HOW YOU CAN HELP

It’s a red flag when an annuitant asks for their structure documents out of the blue. If they’re asking, it’s most likely because they need them for a factoring transaction with a Cash Now company they saw on TV. This is the best time to keep an annuitant from being victimized. How?

  • Ask what they need the docs for; Is everything okay? Anything you can do to help them? Is this for a factoring company? Context matters.
  • If you have a factoring consultant you trust, suggest they call that person to ensure they are considering everything before moving forward. The Cash Now companies urge annuitants to cash out everything, either the first time or through harassing them into subsequent transactions. A proper consultation will help annuitants address their immediate situation and keep needed future payments intact. It also clears up any ad-based misconceptions, like whether they actually get cash now (they don’t), or whether there’s a formal process to go through (there is).
  • Let them know, as the structure expert, you are recommending a trusted factoring expert. Your referral means a lot to an annuitant in need.
  • Do not try to talk an annuitant out of a factoring transaction. They’ve already made their decision. It’s more compelling for a trusted factoring consultant to go through their situation in detail and let them know when factoring doesn’t make sense.
  • Ensure that everyone on your team, from support staff to case managers, know what to look for and how to address it. Have a trusted referral standing by.

Last, and this is vital for annuitants to understand: the availability of factoring is an added value to their structure. However, it should only be done when it makes sense and is truly needed. Factoring shouldn’t be done just because the option exists, and especially not due to the sales pressure of a Cash Now company or the siren-song of an immediate payday. Together, we can make sure annuitants are properly taken care of and do not become victims of sleazy telemarketing, catchy jingles, Words with Friends ads, or their own desperation for cash now.

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October 22, 2026
Back in May, John Oliver closed his segment by proposing that a one-time independent guardian or advisor review every sale before it happens, and a handful of states already appoint ad litems to do something close to it. On paper it's hard to argue with: a court-appointed advisor canvasses the market and makes sure the annuitant walks away with the highest offer on the table. We'd love to tell you it works. In practice, it too often produces the opposite of what it promises. Here's what actually happens when an ad litem "shops the market." The ad litem, who as a rule knows the courtroom far better than they know factoring or finance, solicits competing bids and takes the best one. But the market they think they're canvassing isn't the market that exists. Big players, such as those with a family of companies, operate under enough names that a fistful of "competing" offers can all trace back to the same firm — a point we raised about industry aliases a decade ago, and one a Kiplinger column echoed this past June. The ad litem believes they've run a wide, competitive canvass. Often, they've just collected several quotes from the same house. It gets worse where the competition is real. In the few jurisdictions that mandate ad litems, a dominant firm, and one in particular, can afford to bid below its own cost — not to serve the annuitant, but to win the deal and bleed the legitimate competitors who can't match a rate that loses money. It absorbs those losses on the strength of the notoriously poor deals it writes everywhere ad litems aren't required. Do that long enough and the smaller ethical firms simply leave those markets or leave the business altogether. Once the competition is gone, the "best available rate" is whatever the last firm standing cares to offer, and it’s always the big one with its support cast of companies — which nullifies the entire reason for appointing an ad litem to find the best deal in the first place. The reform meant to guarantee competition ends up quietly strangling it. If that pattern sounds familiar, it should: reforms in this industry have a long habit of ending up as a gift to its biggest players. So no — we don't champion the guardian ad litem. Not because independent advice is a bad idea; it's a fine one. It's because an advisor who canvasses a rigged market and doesn't know the finance well enough to see that it's rigged, isn't the safeguard everyone assumes. The protection that actually works costs nothing and predates all of this: education and a referral. An annuitant should first hear about factoring from the structured-settlement broker who built the annuity, and that broker should refer only to factoring professionals with a clean, ethical record — no court appointment, no cold calls, no counterfeit competition, just a trusted professional pointing the annuitant toward one we'd put our name behind.
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