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Issues within the Factoring Industry

Below are some of the key issues that are currently occuring in the factoring industry. Click the title of each issue to learn more about it.

Scraping is the practice of factoring brokers obtaining annuitant contact information either by going through court records or buying the information from someone who has already done so, and making contact with these annuitants without a referral or previous business relationship.  In short: factoring brokers make cold calls to annuitants in an attempt to convince them to sell their structured settlement or annuity payments for a lump sum.

Forum shopping is the practice of finding a ‘factoring friendly’ county with fewer or easier regulations in order to get a factoring transaction approved.  Florida’s Sumter County is the textbook case for this practice.  It is often referred to as the ‘rubber stamp’ county for factoring transaction deals due to the ease in which these deals are approved.

In short: when a salesman doesn’t take ‘no’ for an answer or refuses to comply with an annuitant’s request or demand to cease contact.  This can be by phone, direct mailing, e-mail, contact by social media, or showing up at one’s residence or place of work, as examples.


It takes a great deal of time and effort to put together a structured settlement or annuity.  Factoring a deal doesn’t have to be the entire settlement or annuity, it can be a portion.  When it is a portion, it’s understandable that a factoring company will desire repeat transactions with a client that they had previously done business with.  A follow-up sale is always acceptable, if not encouraged, for most industries.  In the structured settlement industry, however, the purpose of the settlement to begin with is to assist a victim in a time of hardship.  Factoring a deal is also for that purpose.  Even sending a query for an additional deal is for the same purpose – but to do so constantly, that becomes the questionable activity.

Poaching is an unethical practice where one company, which has already signed a contract with an annuitant, will be outbid, or at least promised an outbid, by another company seeking the annuitant’s business.  The annuitant will, despite the contract, go with the other company’s (presumably) higher bid and sign a contract with them instead of the original company.

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.


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