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Free iPad for $40k

Do you like iPads? How about TVs? A nice Belgian waffle-maker? If you answered yes to any of those perhaps you should pay closer attention to the sorts of marketing schemes coming out of a particular factoring company that shall remain respectfully (and ruefully) anonymous. Oh, and make sure that you’re also willing to enter into a contract for at least 40k of your structured settlement payment stream. Apparently it’s no longer enough to be tempted with cash now, or even cash tomorrow – now cash with a side order of Apple product, big screen TV, and high quality breakfast machine is the name of the game. Available while supplies last, of course.

Since this Initiative’s launch on March 30th, I’ve heard quite a few interesting stories from annuitants who want to have their voices heard. One story I heard this morning bears repeating if for no other reason than our collective astonishment. For the purposes of protecting this annuitant’s identity, her name will be ‘Jennifer’ below.

Jennifer received a settlement on behalf of her deceased son. She needed to factor out a portion of her payments due to ongoing medical issues and wished to preserve the rest that she didn’t immediately need. Ever since receiving the settlement she has been ceaselessly contacted by companies trying to convince her to factor out some or all of her structured settlement. Once she did choose to factor out what she needed, the already ceaseless contact only further intensified.

Jennifer receives dozens of letters a week, and of those letters, many of them are the “Gotcha!” checks we discuss in the issues section of this site. Only recently, however, has a new marketing strategy emerged: that of offering some kind of physical, tangible product, in this case an iPad, alongside the cash that’s being factored out, and only if the deal is 40k or more. That’s quite the expensive iPad! Let’s examine the peculiar ethical and logical issues here…

If a company is trying to sell a service for cash now, why isn’t that cash enough? Why must it be cash … and a shiny new iPad! Or what have you. This seems a classical non-sequitur; the logic simply does not follow. If someone needs cash then why would they be tempted by a simple iPad? Is this some form of generosity? If so, why then would a minimum deal of 40k (or any minimum, really) be required in order to obtain this physical incentive? Perhaps this is merely a consolation prize for doing business with such a company that would engage them as though they needed a little push to buy a new barbeque; I mean hey, it came with a free spice rack! Who could resist such a deal!

Ethically there’s nothing wrong with offering additional incentives to a service, but when trying to convince an annuitant to sell part or all of their structured settlement payment stream… is an (relative to the 40k minimum) inexpensive physical item truly going to be the deal-maker or breaker? Again the issue is a matter of context. The financial security of the annuitant is at stake during any consideration of a factoring transaction. Offering some small gift reward, be it an iPad, TV, or waffle maker, pales in comparison to the potential financial difficulties that may result from an improperly executed factoring transaction as a result of poor reasoning. But hey, at least they’ll have an iPad if their financial situation gets worse… as long as supplies last.

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