ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Congress Considers Crackdown on Lawsuit Settlement Buyouts

Updated on September 4, 2015

More Regulation Coming for Structured Settlements

Congress and the Maryland Legislature are considering legislation to clamp down on companies that purchase settlement payment rights from claimants who win lawsuits.

The companies sometimes are criticized for profiting off the need of low income and disabled persons for quick financing.

A Washington Post article said the companies pay the claimants only a small part of the money they could receive from the lawsuits. Often, the claimants are victims of lead poisoning who suffer brain injury.

The buyouts are directed at structured settlements, which refer to payments made in installments over many years. They are supposed to protect vulnerable claimants who otherwise would be likely to spend all of their money unwisely for what they believe is an immediate need.

Structured settlements are different from traditional settlements, which are paid out in a lump sum.

Maryland and other states have tried to prevent predatory buyouts of structured settlements with laws that require a local judge’s approval before the payment rights can be sold. In Maryland, the law is called the Settlement Protection Act.

The laws commonly are designed for victims of lead poisoning, many of whom ingested paint or other lead-bearing products that were used to build houses until the mid-1900s. The victims often suffer cognitive problems that can impair their judgment.

The Washington Post story said the Settlement Protection Act has failed to halt manipulation of the people it was designed to protect. One of them sold $338,000 of payments for $63,000.

Another was a young woman who suffered mild mental retardation. She sold all of her payments due through 2030 and is now homeless.

Companies that purchase the structured settlements say they often help their customers by getting them money quickly that has saved their homes or paid for college educations.

Maryland Delegate Samuel Rosenberg (D-Baltimore) said he plans to introduce legislation soon that would more closely regulate the purchasing companies. His promise of action was followed by members of Congress who said they would investigate the buyouts.

Structured Settlement Buyouts Accused of Being Manipulative

Companies that purchased structured settlements are being accused of taking advantage of poor people.
Companies that purchased structured settlements are being accused of taking advantage of poor people.

Comments

    0 of 8192 characters used
    Post Comment

    • Tom Ramstack profile imageAUTHOR

      Tom Ramstack 

      3 years ago from Washington, D.C.

      That's exactly what the people in Congress and the Maryland Legislature are saying. The reason some poor people was manipulated is because nobody realized the extent of what was happening behind the scenes. I'm sure any new legislation will include vastly expanded disclosure requirements.

    • MarleneB profile image

      Marlene Bertrand 

      3 years ago from USA

      I have seen these advertisements and thought it was a great way for people to receive funds up front instead of waiting. Now, after reading your commentary, I am not so sure it is a wise thing. I had no idea people were being taken advantage of to such a serious degree. You have made me more aware. More people should know about this.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)