What can YOU do?
September 30, 2015
What can someone do when confronted with the realities of court scraping, shady forum shopping, deal poaching, aggressive solicitations, and poor rates on factoring transactions, especially from big factoring firms?
- If you think your clients aren’t factoring, think again. They are getting hounded by mail, phone calls, and ads on TV. Most of the time, they don’t feel the need to call their brokers about factoring.
- If word reaches your ear that an annuitant is being hounded, refer them to www.stopcashcalls.com and www.factoringethics.com. Information is out there to arm people against factoring predators; give it to them.
- Let them know what to expect once their case is structured. When it comes down to factoring, refer only to those you know to have good track records; those who don’t engage in unethical, aggressive, or shady behavior.
- Know who’s doing more than just talking the talk – know who’s walking the walk. Bentzen Financial is leading the way to clean up the industry. We wear the title “irritant” of the big factoring companies with pride. Click here for more on choosing Bentzen Financial.
- Know why the factoring giants have notoriously poor rates, in general; it’s simply a matter of cost. The bigger you are, the more it costs to get and close a deal. Click here to learn more on this topic.
- Sign our petition to protect the personal identification information (PII) of structured settlement beneficiaries so that they won’t get scraped by shady factoring companies.
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It’s a time to be thankful! We’d like to show our appreciation for everyone out there who, like us, is focused on crafting the best solution to our clients’ needs. Moreover, the season demands we take the time to acknowledge a few things. First, and the hard work NSSTA has done to ensure greater fairness in the factoring process. Work in Georgia and Florida to ensure aggressive poaching has been nullified is commendable and should be the standard everywhere. Likewise, a tip of the hat to Texas, whose personal identifying information (PII) protections guarantees that annuitants don’t get harassed ad nauseum from the moment the ink dries on their structured settlement agreements or when they’ve made the decision to cash something out. We’d also like to thank the work of those who go unrecognized too often: the IPAs who help both us and the courts with guaranteeing that our more vulnerable annuitants get the proper added input and security. It’s not required in all states, but we’re sure to use them as often as we can. The best consultation doesn’t just come from us, and we know plenty of clients need that added layer of protection to feel comfortable. Where some may try to lead annuitants away, knowing full well that the deal is a result of their aggressive telemarketing or clever jingles, we know we can trust you and your referrals. They wouldn’t be doing this unless they needed to. Finally, we give thanks to you. Enjoy the turkey, good company, and inevitable food coma.
“Happy Halloween!”
Factoring isn’t the boogeyman and structures are not perfect.
The best structured settlements are beautiful, but don’t get attached to them. Life happens, and as such it’s life, not factoring, that is the enemy of a structured settlement. The best laid plans, like the best policies, with the best intentions, can’t s
Myth: You will lose money by factoring, so take out a loan instead. Reality: Whether you factor annuity payments or take a loan, there is a cost to obtaining money, but many people believe that factoring involves “losing” money. This misconception comes from comparing the cumulative future payments with the present value lump sum payment offered by the factoring company. For instance, if an annuitant has 200 monthly payments of $1,000 , the cumulative payments would be $200,000 . In this case, a factoring transaction might net the annuitant approximately $100,000 or 50% of the cumulative total. This is not “losing” money, it is the result of obtaining future payments early at a 10% discount rate. If instead the annuitant took a $100,000 loan at 10% and paid it back over 200 months , the total cost including interest would also be $200,000 (assuming the annuitant had sufficient credit to get the loan). A loan requires credit, collateral, origination fees, and carries the risk of late fees and foreclosure if payments are not made when due. In the factoring scenario, the annuitant would need to wait 200 months (almost 17 years) to collect the full $200,000 , during which time the equivalent present value of the payments is continually diminishing due to inflation. A dollar will not have the same purchasing power in 17 years as it has today.
