Litigation

The press release just been issued by Settlement Marketplace seems great on its face. A company that buys or arranges for the purchase of structured settlement payment rights and other cash flows, has promised to donate 15% of its profits every month to an orphanage in Colombia.

Jorge Cortes, owner of Settlement Marketplace, has apparently promised the children of Instituto Oscar Scarpetta Orejuela, an orphanage in his home country of Colombia, 15% of his profits every month. All of the money that Cortes raises for the orphanage is used to supply the children with food and quality education. The orphanage has been in existence for 80 years in Cali, Colombia.

While Mr. Cortes probably has honorable intentions, the "profits" he makes come off the backs of tort victims that Mr. Cortes own website identifies as "hardship" situations. Thus conflicted, the amount of profit that Cortes donates may ultimately mean that the person who is trying to raise cash through such sales must sell more of their asset than is necessary.

While I am sympathetic to the plight of the orphans of Cali Colombia (or needy persons in other parts of the world), should we not be concerned about the consequences of  Mr. Cortes and others using this advertising strategy to lure unsophisticated tort victims into selling their payment rights without proper disclosure about how such "profits" negatively impact their deal? While there has been a long history of immigrants sending money back to the home country, they shouldn't have to effectively borrow money at high rates, or impinge long term financial security to do it.

This author encourages judges and those providing independent professional advice to be aware of this scheme and to do their own due diligence.