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How is deception a problem in the factoring industry?

With disturbing frequency, annuitants report being misled by cold calling sales representatives who pretend to be representatives of other companies, usually companies that the annuitant is already familiar with or has a working relationship with in the past, for the purpose of scraping business out of them.  For more information on scraping please consult the appropriate page under the issues tab.


Are there any other deceptive tactics being used?



Beyond deceptive cold calling, there is the problem of deceptive direct mailings.  Unauthorized use of logos, emulation of letterhead, language geared to make it appear as though it is coming from a different company, etc. are all tactics employed by the more unscrupulous engaged in direct mailings for the purpose of obtaining business from annuitants.


Potentially the worst deception is also a direct-mailing issue; letters will arrive at the annuitant’s residence that appear to be legitimate checks from banks, insurance companies, or other institutions, that suggest a cash reward being offered.  These are traps in the most literal sense of the word.  These checks are nothing more than the epitome of many-strings attached “gotcha!” checks for the unsuspecting annuitant.  The worst deception that can be brought upon an annuitant is to believe they are being compensated for something and to find out that they’re merely being victimized even further.


Not all letters received in the mail, moreover, are actually valid checks.  Some are, some aren’t.  This depends upon the state and the business; some states make the practice of sending such checks illegal, such as Tennessee, and some businesses just don’t want to send redeemable checks out to people during solicitations.  Even when not sending redeemable checks, however, the sheer frequency of the checks arriving makes this a problematic activity once again due to its harassing nature.  One testimonial, with a request for anonymity, emphasizes great concern for her children receiving redeemable checks and not having the wherewithal to understand that they’re traps.  She worries for their financial safety.  Set aside for a moment that an annuitant’s children are receiving checks, not just herself, the problem of sending such checks to people who don’t know any better carry enormous practical and ethical implications.  Annuitants don’t deserve such treatment, and their relatives absolutely don’t.  Being aware of the practice is the first step in combatting it.


Structured settlement holders have already suffered hardships and do not need to be further victimized by such practices.  Sample checks are attached below so that they can be identified as the cons they are.  Please note that identifying markers have been removed to protect the anonymity of recipients. 


To view a gallery of other deceptive letters and evidence of such behavior, please click here.


What can be done about it?

Exposing the deception is the first step in combatting it.  If companies and their representatives are exposed then they cannot continue to engage in the practice.  Even if they do, if both industry professionals, plaintiffs, and annuitants are aware of the behavior, they can be prepared for it and not be fooled by it.


If the cost of engaging in the practice exceeds the potential profit, such a practice will naturally stop.  Shining the light on the behaviors will assist as long as brokers help inform annuitants about the potential practices of the more unethical actors in the factoring industry.


We encourage anyone who can provide photographic or video evidence of, for example, the “gotcha!” checks to provide the evidence for review and, with written permission, posting to the gallery for all to see.  If you’d like to assist, please click on the contact button in the top right corner.

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