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Peachtree Settlement Funding Again Criticized for Charging High Rates
Structured Settlement Company's Recent 71.40% Annual Interest Rate Filings Confirms Reputation For High Rates
By: Clete L. Thompson
In the comprehensive opinion, Judge Norma Ruiz outlined Peachtree’s business practices in The Matter Of The Petition Of Settlement Funding Of New York, LLC v. Hartford Comprehensive Employee Ben. Svc. Co. (Melissa Feliciano), Index No. 260551/2009, Supreme Court, Bronx County, N.Y. (N.Y. Sup. Ct. May 26, 2010).
“Such a discount rate is more than double that which banks are currently charging and more than even the steepest credit card rates of 29%,” explained Judge Ruiz.
Judge Ruiz went on to comment, “Apparently, there is a growing proliferation of late night and cable television commercials by factoring companies promoting these transfers, utilizing catchwords such as ‘It’s your money and you should have it now’. These commercials leave desperate viewers with the purposeful impression that they will actually receive up-front, dollar-for-dollar exchanges as soon as they apply. Such disingenuous marketing serves to promote the financial gain of these factoring companies while undermining the integrity and legitimate purpose of structured settlements. Payees . . . discover after they’ve applied for these transfers, that the illusion of receiving all of their money up-front, rather than later, is not the reality.”
One industry insider estimates that Peachtree’s overhead, which includes costs for extensive television advertising, could add as much as $10,000.00 to each structured settlement purchase. These costs ultimately are paid for by the customer. The result is these extraordinarily high interest rates like those criticized by Judge Ruiz.
Peachtree’s high discount rates cannot continue. As both sellers and courts become more aware of the financial beating delivered at the hands of certain factoring companies, these companies will either go out of business or will be forced to drastically reduce their rates as the courts deny their transfers. "Smart customers shop rates. Many judges question customers to ensure that they are getting a fair deal by requiring evidence of competitive shopping," commented Stewart Feldman, an attorney long active in the factoring industry throughout the U.S. Feldman cited RSL Funding as offering among the best rates in the industry, with Peachtree and Imperial generally offering among the least value to the customer.
RSL Funding informs customers that are the victim of unreasonable charges that there is an alternative and RSL Funding makes competitive bids for the purchase of their future payments. Typically, RSL Funding acquires payments free of fees and costs imposed on customers.
In an effort to dissuade more competitive companies like RSL Funding from competing with it, Peachtree has more recently resorted to suing its competitors to at least temporarily maintain Peachtree’s high interest rates. Lawyers for Peachtree were asked for comment but did not return our calls.
For further information, contact the Structured Settlement Institute (SSI) at (561) 880-0333, a not-for-profit organization established to educate sellers of structured settlements regarding fair and equitable practices among providers of structured settlement transfers.
Clete L. Thompson
Structured Settlement Institute (SSI)
Boynton Beach, FL