Selling Your Structured Settlement: Avoiding Fraud

Avoiding FraudLike most other industries, the structured settlement industry has a few dishonest companies that are willing to profit even if their customers are harmed. Some folks are scared to sell their structured settlements out of fear that they could fall victim to a scam artist.

You don’t have to lose out on the benefits that can come from selling your structured settlement! Let’s go through some of the ways to protect yourself when looking for an honest company.

Structured Settlement Fraud

There are a number of ways that dishonest structured settlement buyers mislead their customers.

  • One of the common forms of fraud occurs when buyers tell sellers to lie to a judge about how they plan to spend their lump sum cash settlement. (If a judge believes that the reason for the sale is not in the seller’s best interest, he or she will reject the agreement.)
  • Some buyers falsify documents to make it seem like the seller lives in a state with fewer regulations against selling structured settlements.
  • Some buyers will allow you to “sell” your structured settlement before the court actually approves the deal. But if the judge doesn’t approve the deal, you have to pay the money back, often with very high interest.
  • Beware of advances. Some companies will give you an advance as a way to lock you into doing business with them.  The truth is that you can always cancel until the deal is finalized…though you’ll have to pay the advance back, of course.  Additionally, if the court does not approve your sale, you’ll have to pay the advance back as well.
  • Read your contracts carefully!  With some companies you’ll agree to terms over the phone and then see different terms in the contracts they send you to sign.  And for life contingent deals, some companies will purchase life insurance on your behalf and include that cost in your contract without discussing it with you.   Buyer beware!
  • Don’t sell more than you need to. You need money now, and selling your structured settlement is a great way to get it.   Know how much cash you need, and then sell enough payments to get the lump sum you need.  Don’t let a pushy salesman talk you into selling anymore!


The best way to protect yourself?  Work with a structured settlement buyer with a good reputation.  RSL Funding has an A+ rating with the Better Business Bureau.  If the structured settlement company you’re talking to skips over why you want to sell and just makes an offer, you can tell they’re thinking about themselves, not you.

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