As predicted, the pandemic has spawned a new factoring ploy, except this time it is disguised as altruism. You may have already received solicitations promoting COVID-19 loans, or furlough assistance, or paycheck protection, or something to that effect. Factoring companies are counting on sidelined workers and businesses becoming desperate as savings and government subsidies run out, because that’s when they’ll step in with their supposedly compassionate loans.

Decades of experience tells that the probability of an annuitant having the ability or will to repay a loan or cash advance is slim to none. These factoring companies know that. They see annuitants as the hungry fish that doesn’t realize there is a barbed hook hiding underneath that fat, juicy worm. And just like the fish, it’s going to be next to impossible for annuitants to shake free from the hook once that check is cashed. An inevitable factoring transaction to repay what is owed is all but guaranteed. And that’s the scam.

In our opinion, the security of guaranteed structured settlement payments is now more valuable and important than ever. That said, a factoring transaction can be a legitimate way for some annuitants who have been devastated by the economic shutdown to gain the liquidity needed to get back on their feet. But it’s a difficult decision that should be made only after careful consideration of the facts and options, not after being baited with loans.

Stay safe and healthy out there.