Litigation

Referring to yesterday's discussion of Structured Asset Funding's in-house counsel Robert Ostrov's explanation of structured settlement factoring a competitor offers the following response:

"The comparison of discount rates to credit card rates is a bit absurd and seems to be a way for Mr. Ostrov to justify why his or other structured settlement factoring companies charge such high rates. Any company in the industry has the ability to provide rates under 10% (emphasis added). Here is another list of reasons this comparison is absurd:

• Credit card interest rates are determined by an individual?s personal credit score (and other factors)
• Discount rates in factoring transactions are determined by a companies (sic) financial rating (most life companies retaining a A to AAA rating)" Andrew Cravenho, Settlement Quotes, LLC

Cravenho also states that high average effective discount rates are the result of "the unwillingness to shop around by most annuitants and the low ball and readjust pricing models that most companies use to price transactions equates to higher effective discount rates".

For Cravenho's complete response click here

For consumers who have no alternative but to go down this road, the higher the effective discount rate the less money for you.