I have written before about the vast amount of misinformation out there on structured settlement factoring. But, misinformation is only part of the problem. Underlying some of the misinformation and some of the criticism of the factoring world is an inherent belief that factoring is evil (or at least very bad). Not that some factoring folks are bad, or that factoring is bad for some people, but that factoring in itself is, inherently and intrinsically, bad. This view is all too pervasive, and seeps into legitimate discussions about some factoring practices, unfairly coloring the discussion. Let me give an example.

John Darer, a structured settlement broker (that means he advises and helps people settle lawsuits and get into structured settlements), blogger extraordinaire and someone I admire has been engaging in a blog discussion about structured settlement brokers who accept referral fees for sending customers to factoring companies. This is an important discussion, and John has raised good points. However, intertwined in the dialogue and in some endorsements of John’s “clean vendor list” is the “factoring is evil” theme. The best example of this is Richard Halpern’s voiced support for eliminating factoring referrals, quoted by John in his December 13, 2007 posting. The discussion is whether structured settlement brokers should receive a referral fee for sending customers to factoring companies. John thinks not, as he sees this as “taking money out of the pockets of tort victims.” Mr. Halpern supports John’s position – or does he? “I applaud your call for all structured settlement brokers to sign your affidavit and to refrain from helping plaintiffs squander their money.” Mr. Halpern is apparently supporting a different plan, one that eliminates any referral to a factoring company at all – not simply refraining from taking a fee for doing so. That is clearly not what John is suggesting. Arguments about whether factoring leads to plaintiffs “squandering their money” should be considered independently and not mixed into this discussion.

I suggest that unless your “worldview” of factoring is clear, honest debates like this one can never go anywhere. Should factoring be abolished? If not, then at what level of involvement should various advisors be engaged? Who are these advisors? Several of John’s posts indicate that he thinks everyone who factors payments should be represented by an advisor. Who pays for that? Is there any difference between the payments that would need to go to such advisors and the payments to a broker who refers the business? They both would “take money out of the pockets of tort victims.” Is there a value being added, or otherwise a justification for the fee?

We’ve already said goodbye to 2007, let’s also say goodbye and good riddance to misinformation. Clear thinking and clear communication will help us all move our respective industries forward – beyond the misconceptions.

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