Dec

jg wentworth scam

By CEVA

jg wentworth scam

Selling the Golden Goose

Selling off a Structured Settlement

It was the frequency of daytime television commercials that caught my attention.J.G. Wentworth is a company that trades lump sums of money to people who have won A. a personal injury lawsuit or B. the lottery. Oftentimes, a lottery or lawsuit winner will be paid in monthly or yearly payments.

For example, the California Lottery pays Mega-Millions winners 26 payments over 26 years. If a $52 million winner grew restless with her pitiful $2 million dollar/year payoff, she could sell that income stream to J.G.Wentworth for a fat one-time check for $25 million or so.

In a similar way, a person that is receiving a structured settlement from a lawsuit can trade his monthly settlement checks for a big one-time payment.

My first question was, of course, “how big a cut do they take?”

When I visited their website, I didn’t find my answer, just a lot of contact us. (By submitting the information above I expressly grant permission for a representative of J.G. Wentworth or its affiliates to contact me regarding products and services.)

I found this great quote in the lottery payment purchase section: The disappointment of lottery winners who do not receiving a lump sum of money, after winning the lottery, is understandable. Many winners find themselves unable to invest into a new house, purchase their dream car, or overall elevate to a lifestyle they envisioned. J.G. Wentworth enables lottery winners to receive a lump sum of money instead of receiving it in structured settlements.

Luckily, they had a bunch of client profiles. Profiles in Value that I believe showed the success of J.G.Wentworth more than the success of their clients.

Here is a summary of the five client profiles that included financial details:

Name	Traded	Total Value if Paid over the Years	Lump Sum from J.G.W.
Kathy K.	$560/month x 122 months	$68,320	$38,000
Dena T.	$1,096/month x 30 months	$32,885	$24,139
Rachel V.	$343/month x 96 months	$32,972	$16,000
Deborah D.	$1,500/month x 120 months	$180,000	$110,000
Bill W.	$1,700/month x 84 months	$142,800	$45,000

Kathy K’s story is similar to borrowing $38,000 and paying $560 a month until it is paid off. If she could get a loan at 12% APR, she could pay off a $38,000 loan in 116 months. At 8% she could pay it off in 93 months.

Dena T. wanted $24,139 and had $1,096 times 30 months to pay it back. This is similar to a loan at 18% APR.

Rachel V. needed $16,000, and had $343.46 to spend each month. Using 96 payments of $343.46, she could pay that off, even with an APR of 20%.

Deborah D. had a ton of money to work with, 120 months of $1,500. If she had borrowed her $110,000 at 10% APR, she could have paid it off in less time (117 months).

Bill W. didn’t do so great. If he had borrowed his $45,000 on a credit card, and paid it off with $1,700 payments, he could have paid it off with 40 payments, even at 22% APR. He could have saved money if he had found a $45,000 loan charging 25% APR, 30% APR, or even 40% APR.

I know that everybody doesn’t qualify for a low interest rate. Some people cannot be trusted with money, and have to pay more to borrow money, but I can’t imagine myself trading away a steady stream of significant income for a big lump sum. I just don’t know why a reasonable person would do it. Maybe I’m just jealous.

-Thank you.