Legal Databases & Scrapers

November 19, 2019

Factoring industry leaders have made recent overtures towards needed ethics reforms, but they can’t be taken too seriously without the industry properly addressing the root cause of most abuses: court record scraping. We’ve talked about this before. It’s still the number one driver of annuitant harassment and foul, even abusive, business practices. It all stems from access to online legal databases and use of these databases for purposes that are blatantly violating their terms of use at best, and explicitly illegal at worst. For example, these databases specifically prohibit:

Commercial Exploitation – Database firms state that their services are intended for legal, business or scholarly research and analysis.

…data may not be used for commercial solicitations, marketing, fundraising, or other similar activities.

You will not reproduce, duplicate, copy, download, store, further transmit, disseminate, transfer, or otherwise exploit this website

…whose primary purpose is to perform professional, business or educational, research and analysis, and you are working in a court or government agency; a professional or business corporation, organization or other similar entity

The Content on this Web Site is for your personal use only and not for commercial exploitation.

Legal Violations – Database firms prohibit their services from being used to break the law, but the scraping of these databases is the proximate cause of the relentless phone solicitations that are, for the most part, violations of the federal Telephone Consumer Protection Act (TCPA).

You will not use, intentionally or unintentionally any of the content, information, or services on this website in a manner contrary to or in violation of any applicable international, national, federal, state, or local law, rule, or regulation having the force of law.

…and shall not be used for any illegal purpose or in any manner inconsistent with the provisions of these TOS.

Derivative Works – These firms do not allow users to sell products created from their databases, but there are several firms that glean these databases to offer prospect lists of annuitants.

You may not modify, publish, transmit, participate in the transfer or sale of, reproduce, create derivative works from, distribute, perform, display, or in any way exploit, any of the Content, software, materials, or Site in whole or in part.

You may not decompile, reverse engineer, disassemble, rent, lease, loan, sell, sublicense, or create derivative works from this Web Site or the Content.

…share, recompile, decompile, disassemble, reverse engineer, or make or distribute any other form of, or any derivative work from, the Services, or Content, or any portion thereof;

You shall not sell, license, or distribute Content (including Downloaded Content) to third parties or use Content as a component of or as a basis for any material offered for sale, license, or distribution.

Ultimately, factoring is a legitimate service for certain annuitants in need of liquidity. We maintain that annuitants should be the ones who reach out if they choose to explore that option. Instead, they are constantly subjected to high pressure solicitations through phone calls, junk mail, social media stalking, and even front door visits, all based on information scraped from these databases.

It needs to stop.

Either online databases need to start enforcing their terms of use or the factoring industry needs to be regulated. Which would you rather have, and which is likely to happen first? Don’t just let us know, let the database providers know. Annuitants will thank you.

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Myth: You will lose money by factoring, so take out a loan instead. Reality: Whether you factor annuity payments or take a loan, there is a cost to obtaining money, but many people believe that factoring involves “losing” money. This misconception comes from comparing the cumulative future payments with the present value lump sum payment offered by the factoring company. For instance, if an annuitant has 200 monthly payments of $1,000 , the cumulative payments would be $200,000 . In this case, a factoring transaction might net the annuitant approximately $100,000 or 50% of the cumulative total. This is not “losing” money, it is the result of obtaining future payments early at a 10% discount rate. If instead the annuitant took a $100,000 loan at 10% and paid it back over 200 months , the total cost including interest would also be $200,000 (assuming the annuitant had sufficient credit to get the loan). A loan requires credit, collateral, origination fees, and carries the risk of late fees and foreclosure if payments are not made when due. In the factoring scenario, the annuitant would need to wait 200 months (almost 17 years) to collect the full $200,000 , during which time the equivalent present value of the payments is continually diminishing due to inflation. A dollar will not have the same purchasing power in 17 years as it has today.

One Simple Step to Stop Abuse!

September 20, 2022

The foundation of abuse in the factoring industry is cracking! South Carolina’s supreme court as well as its senate are readying for reform in response to the most recent expose (see here , here and here ). Both the court and the legislature are intent on fixing a clearly broken system. Despite the natural inclination to copy what other states have done (MN, GA, LA, etc.), whose reforms ironically ended up benefiting the worst abusers of the industry, we suggest a simpler reform that will solve the absolute majority of abuse: Keep the personal identification information (PII) protected for all structured settlement recipients from here on out. This way, the companies guilty of these abuses won’t be able to find new victims. More: make such protection retroactive. This is already standard practice for minors receiving structures, and it works, at least until they turn 18. Extending this protection would do wonders for structure health. What predatory companies can’t find, they can’t chase. Keep people safe and their identification information secure. Advocate for smart reforms.

Something's Hitting the Fan with the 11th Circuit

June 27, 2022

Another day, another question of abusive cash now transactions. Another lead paint victim, too. See here for more details. It all begs the question: why do the big cash now companies prey on the head injured? Is it a delicacy? Or are they just hoping no one will notice? Ladies and gentlemen, this is why we harp on brokers needing to educate their annuitants on how factoring is useful in some situations, and completely inappropriate in others. It’s why brokers are the referral gatekeepers, or at least, they should be. Anyone with a severe personal injury, especially one affecting their judgment, requires greater aid in both pre and post structure environments. Even if a factoring transaction might have addressed the legitimate needs of the man in the article, was factoring the whole thing really necessary? Probably not. It’s why consultation is required, not just telemarketing. As for the court and its involvement in the issue of whether insurers have a duty to question factoring transactions, full stop. Requiring insurers to question factoring transactions would increase their liability, as well as the fact that while courts must apply the best interest standard, an ethical factoring company uses the annuitant’s best interest as its guiding light. Furthermore, it is the duty of the court to determine whether a factoring transaction is in the best interest of the seller and serves as final gatekeeper. That’s the whole purpose of going to court in the first place. If not the courts, then the legislatures in whatever state is affected by abusive or exploitative practices. We’ve seen this throughout the country in the past few years, such as in Louisiana, Georgia, and Minnesota. It’s cumbersome to add additional requirements upon the companies involved in a potential transaction when the issue isn’t whether the company’s sought to conduct business as usual, but whether the court authorized it in the circumstances they are meant to scrutinize. Factoring transactions can and should be done according to set rules. No forum shopping, no poaching, no scraping, no “gotcha!” checks, no flagrant flouting of the TCPA and other applicable state consumer protection laws. There’s a right way and a wrong way. Promote the right way. Educate. Consult. Refer. We’ll be here.

Cam Mears on Factoring with Dan Finn

November 22, 2021

We're thrilled to see that others are contributing to the factoring expose by the Minnesota Star Tribune . This time, structured settlement consultant Dan Finn. You can read his take on factoring and the Star article here . What's more, you can see Cam Mears delve into the details on factoring in his one-on-one interview with Finn here on YouTube! Factoring doesn't have to be the boogeyman. Make sure it's done right by referring only to those you trust to offer proper consultation.

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