Wednesday, August 06, 2008

Whose Money?

I find that I cannot stomach a lot of TV commercials that are out there today. They tend to employ deception, vanity, sloppy logic and a host of other questionable methods to sell their products. One of the most annoying for me is a company called JG Wentworth. For non-TV watchers, this is a company that will buy out your annuity or structured settlement (I'm sure for a whopping fee) so you can have the money now. The thing that blows my mind is the statement from "clients", "It's my money, I need it now!" My sense tells me that while the money WILL be yours according to the terms of the contract, it is not yet "yours" until the time specified by the annuity or terms of the settlement. Using the logic of this company, my landlord could say a month into a one year lease, "It's my money, give it to me now!" Again, it is not their money nor do they have any claim on it until the time specified in the lease (or possibly when the lease is broken). I structured settlement or annuity is set up the way it is for a reason -- and to demand changing that is likely to leave the recipient wanting in the long term. Why doesn't the company simply advertise their willingness to act on the recipient's behalf as a paid agent to negotiate a buyout of the annity or settlement? That's the true fact -- getting the money now that will be yours later on is gonna cost you -- both in the short term and likely in the long term. Are people so stupid or do the ad people think they are? God, I hope not!


Lemuel said...

Nick, you are absolutely correct! and these ads annoy the heck out of me too. Sadly I realize that all too many people will be cheated out of a large part of what is theirs simply because of their ignorance of what these companies do and out of the sense of instant gratification that has become inbred in us.

Ur-spo said...

of course people are that stupid. why else are these ads out there?
My favorite are the pads you place on your feet to draw out toxins.
jolly good fun
i wish I thought of that scam.

Anonymous said...

I agree that the ads are deceptive and even manipulative. I wouldn't be too quick to talk about the "stupidity" of people who go to places like J.G. Wentworth, however. After all, I suspect that desperation often has a lot to do with it too.

After all, we're talking about a structured settlement here. Usually, a structured settlement is in response to a personal injury or similar claim. It's offered so that whoever the claim is against can avoid going to court and is mainly appealing to the claimant because it means not having to deal with the expenses and delays of a trial.

The problem is, that money is usually meant to pay for the medical bills that resulted from the injury as well as to cover living expenses if said injury adversely affects their ability to generate an income (i.e. they can't make it to work) for a period of time. These are all debts, and those to whom the money is owed aren't exactly known for their willingness to wait for your next annuity payment before they get their money. After all, they want their money now, too. So converting a structured settlement to a lump sum is very appealing. If you're desparate enough, it might even have sufficient appeal to completely ignore the fact that it means receiving less money overall in the process.