Several lawsuits have recently been filed against J.G. Wentworth, the largest purchaser of structured settlements in the United States. The cases stem from the company's alleged deceptive business practices and lowball offers on settlements that shortchange sellers and risk their future financial safety.
According to a November 8 press release from the Structured Settlement Institute, the lawsuits "could lead to large-scale customer refunds, IRS excise tax claims, and injunctions against Wentworth affecting its future business."
Selling structured settlements has become an increasingly commonplace way for individuals in desperate financial straits to repay creditors and stay afloat. However, companies like Wentworth often undervalue people's settlements by thousands of dollars, in some cases leaving them worse off than before the sale.
Many consumers also don't realize that J.G. Wentworth and Peachtree are not competitors, but affiliates of the same enterprise. Their total share of the structured settlement market is estimated at 70 percent. Some of the lawsuits address this near-monopoly, arguing that the two companies collaborate to drive down the perceived value of customers' settlements.
In a recent ruling in Texas, Wentworth was faulted for attempting to force a client to sell her settlement to the conglomerate. The plaintiff's counsel said in a statement that this was "a violation of the protection act. It is also an anti-competitive and anti-consumer position because Wentworth attempts to stop a consumer from comparing offers from Wentworth's competitors."
Selling your structured settlement is an extremely risky endeavor. If you're considering this option, consult an annuity planner in advance to be sure that you're making the right financial decision for you and your family.