If you have had your fair share of legal experience, then the term “structured settlement” is a legal term you are bound to have encountered somewhere during proceedings. If you, however, aren’t familiar with how it works, here’s the simple lowdown:
What is a structured settlement?
A structured settlement is usually an annuity or a large sum of cash that the defendant pays the plaintiff periodically and in small amounts in a bid to divide the sum over a number of time intervals.
How are fraudulent companies taking advantage of structured Settlement schemes?
Unfortunately, the greed of the human race knows no bounds and there are numerous malicious companies lurking in the shadows looking to take advantage of the aggrieved parties. Sometimes an emergency might arise where you need a large sum of cash that your periodical payment simply cannot cover and these companies step in with the promise of instant cash if you sell the rights to your payment to them.
While some are genuine, many others come dressed as the wolf in sheep clothing and here’s how they operate:
1- The legitimate but conniving companies
Generally, there are two categories of companies ripping off people what to sell their structured settlement and the first is a group that operates legally but looks to reap a lot more than they really should. In exchange for a lump sum payment covering the entirety of the settlement payout duration to you, the plaintiff, these companies also serve up a hefty price tag alongside the deal in “processing fees” or whatever else they might call it.
Such entities often lure in clients with the promise of fast cash and often their exorbitant rates are hidden under a heap of poetic language about the benefits of why you need to sell your share as soon as possible. The rates can go as high as 30% or more and the bad news is that although they are taking advantage of the situation, what they’re doing is entirely legal! So watch out for such companies!
2) The outright scammers
The second category encompasses a group that poses under the façade of a “cash now” company when in essence all they’re after is pulling one over on the plaintiff. They achieve their goals by creating a website that purports to represent a reputable company when they are in no way whatsoever associated with the company they claim to be.
Often, such persons will offer an enormous lump sum that is usually really close to the totality of the cash of your structured settlement payments. And this is usually the first sign that the deal is actually too good to be true. So be wary of websites on the interwebs that pose as a platform for buying companies as you could also be at risk of identity theft. Any personal information you fill out on these websites could be used to drain your bank account or, worse yet, commit a crime in your name.
How do you stay a step ahead of companies ripping off people who want to sell their structured settlement?
Circumstances in life may dictate that you cash in on your settlement so as to dig yourself out of a financial hole in which case it is important that you do it right so as to escape the clutches of scammers. Here are a few pointers on how you can stay ahead of the storm of fraud and effectively separate the wheat from the chaff:
1) Heavy and unrealistic advertising is a trait of a scammer
Reputable settlement buyers often rely on getting new clients through word of mouth and companies that overly extend themselves in advertisements are usually a no-no. They aim to blind the plaintiff so that they don’t know they are walking straight off a cliff until it’s too late. Again, if an offer seems too good to be true, it probably is.
2) Don’t sell everything
No structured settlement buyer should convince you to sell all of your payments. Instead, you should sell only what you must to cover the expenses that are of urgency to you. Keep whatever remaining payments you can intact and just cash in on the exact amount of cash you need.
3) Get everything in writing
It is vital that you get a quote from your buyer that should also stipulate whether or not there are out-of-pocket fees in the agreement. A good deal shouldn’t have any. Also, you should seek to have a sit down with a representative of the company in person.
That’s it folks, the dangers of selling your share of the pie of structured settlement and how to ensure you don’t cry foul by steering clear of traps of scammers. Before you sell though, be sure to consult a lawyer or financial adviser to affirm the legitimacy of a buyer’s offer. Online reviews of buying companies are also a good way to single out the good from the bad. Good luck!