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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