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An article entitled "Lead Poising Victim: Selling Future for Cash Now" appeared in the Minneapolis Star Tribune over the weekend which told the story of an 18-year-old girl who sold $352,000 of her structured settlement in exchange for cash payments totaling just $77,000. This girl, who received the settlement after being a victim of lead poisoning as a child, was a high school student and teenage mother when she first attempted to sell her structure. Though two judges rejected her first requests, eventually the large factoring companies working with her were able to push two deals through. This is an example of the shameless side of the industry that takes advantage of unknowledgeable consumers by offering low cash sums in exchange for their future payments. Is it legal? Yes. Is it fair? Absolutely not.

But, as the article points out, judges sometimes miss the mark when they do not enforce the "best interest" clause in the statute. Former plaintiffs will remain vulnerable to these tactics until lawyers, structured settlement brokers and others involved are willing to talk about the realities of the industry, and warn their clients about predatory companies should they ever decide to sell. If a client seeks advice, we as lawyers can advise him/her to get multiple bids and seek other financial options, or refer them to companies who do not utilize steep discount rates.

Hank Didier co-founded Vantage Capital Consultants to help former plaintiffs who may need to sell their structured settlement.

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