The factoring industry is in a state of turmoil. There’s a rift forming between the companies that do ethical business and those that do not, and the outlook is grim if no one stands up to prevent the slide into the mud that declining ethics represents.
Structured settlements are good. This is true for the factoring industry and for annuitants. They represent safe, tax-free ways to channel income to those experiencing hardship in their lives. Structured settlements are the life blood of the factoring industry.
Some structured settlement brokers have no interest in the factoring side of the industry, or alternatively, do not support it and refuse to refer annuitants to anyone at all. This is unfortunate because of why factoring began in the first place.
It’s openly acknowledged that structured settlements are desirable; factoring is no less so as long as factoring is done for the right reasons. Regulations are in place on a state-by-state basis to assure that annuitants pass a ‘best interest’ through the judiciary to prevent dismantling of structured settlements or annuities that should stay the way they are, or to protect some annuitants from themselves – or specifically the temptation present by supersaturated cash now messages that might lure annuitants away from the security of structured settlements for what might feel like winning the lottery. Living large, or the perception of it, is not the purpose behind factoring a transaction that results from a ‘best interest’ test.
FactoringEthics.com exists to serve as an informational resource for brokers and annuitants who want to understand the ins and outs of the factoring industry, including, in particular, discussion of its potentially seedy underbelly. Why? There’s nothing inherently wrong with factoring, but unfortunately there does exist an unacceptable level of unethical practices. If the industry can be cleaned up then it can only help the industry as a whole. When everyone is playing by the same rules, everyone can collectively benefit.
Join us in reforming the factoring side of the industry to conserve the true and original purpose behind it; factoring is perfectly acceptable within certain conditions for annuitants in need. Educate yourself and others using the resources of this site and sign on with the Ethics Initiative today.
You work hard for your business. You ran the gauntlet and put together a structured settlement for your client to be proud of. Protect that investment in time and effort by educating them about the ins and outs of the factoring industry. Inform of them of the potential benefits of factoring their structures out within certain conditions but warn them of the potential predators. Build your faith in ethical factoring companies you can count on and refer to them when it’s appropriate. Don’t leave your clients alone to fend for themselves without knowing who to turn to or who to trust. They can turn to you, and you can turn to this site.
Get involved. Educate yourself and others. Together we can clean up the industry.