Horrified by this story in the Washington Post and others like it, Maryland Attorney General Brian Frosh has filed suit against Access Funding and other viatical settlement companies, asserting that they take advantage of vulnerable victims of lead poisoning by purchasing their structured settlements at less than fair-market value.
Gee, ya think?
I have written about this many times and in other forums, and even been threatened by a few the despicable companies (“It’s your money!”…”I have a structured settlement and I need cash now!”) in this cruel and predatory industry.
Few in the general public know about it or understand what’s going on. Structured settlement are annuities bought by insurance companies to ensure a regular flow of compensatory damages to personal injury and medical malpractice plaintiffs to cover their medical costs and living expenses. The settlements aren’t given out in lump sums because many such plaintiffs are poor and have no experience handling money. A large payment of millions of dollars guarantees that needy family members and friends will beg, plead for and demand loans and hand-outs, while the recipients themselves are tempted to buy luxuries they have long dreamed about with funds intended to cover lifetime cancer treatments.
As I wrote in a post almost seven years ago…
Once they are on their own, however, the compensated victims are targeted by viatical settlement companies, both those with cute opera-singing commercials and those without. They undermine the sound advice of the attorneys with slogans like “It’s your money!” and try to persuade the former plaintiffs to unstructure the structured settlement by selling the annuity’s income stream to the viatical settlement company at a deep discount. Result: the annuity company gets the regular income at bargain rates, and the victims get a new, smaller lump sum to dissipate in exchange. The statistics say that the customer of the viatical settlement company will run out of cash long before he or she runs out of the need for it. But for the company, it’s a sweet deal.