Excessive Profit and The Moral Responsibility of Structured Settlement Companies

Working with structured settlement companies spanning three decades, I have witnessed a lot over the years both good and bad. One of the questions I often struggle with is how to define an excessive profit in a structured settlement transaction.

I often reflect on the role played by structured settlement companies: What is our purpose? What is our role when it comes to serving clients in need and often in desperate situations? If we stay within the legal parameters established by each state, have we satisfied our responsibilities to our customers?

Moral responsibilities of structured settlement companies

This all comes down to the wide gap between the legal and moral obligations of structured settlement companies in this industry and how successfully each company bridges that gap.

Is it possible to make a good profit and still properly serve our clients? Profits are not inherently bad, they are in fact the necessary ingredient for the growth and prosperity of all successful businesses in our capitalist society, but unfortunately companies at times lose their moral compass and take advantage of less informed clients.

How much profit is excessive profit?

The important question is how much profit is excessive profit and whether or not our priorities are aligned with those of our client. Is the stated goal of structured settlement companies to satisfy their client’s needs and earn a profit doing so, or is it to make as large a profit as possible and occasionally, albeit accidentally, satisfy that need?

As in most industries there are good and bad structured settlement companies: some that truly understand the role they play and others that are not concerned about anything beyond making a profit. Their belief is that as long as they comply with state statutes, they have satisfied their obligations to their clients– both legally and morally.

Fortunately the free market works its magic, and due to the competitive nature of this industry, structured settlement companies are forced to offer more to clients who are smart enough to get multiple quotes…but what of those that don’t shop around? Should structured settlement companies offer their clients a little more than they know they will accept, realizing less profit, but ultimately knowing its in the best interest of their client?

Can structured settlement companies make a profit and still be fair?

The prospect of making money and also truly helping a client are not mutually exclusive. Structured settlement companies should be able to walk that fine line, accomplishing both goals and should never attempt to earn excessive profits, or egregious profits on unsuspecting clients. An example would be making a profit on any deal that is more than the lump sum the customer actually receives.

At the end of each day, I often review in my mind the events of that day. I firmly believe the question we should all ask ourselves when our head hits our pillow at night is whether we are satisfied that we did everything in our power that day to grow a successful and profitable business, and more importantly, did we do everything in our power to provide the highest level of customer service to our clients who placed their trust in us… only each one of us can truly answer that question for sure.

Another important question to ponder is how much repeat business you generate. If customers don’t come back, you better start looking in the mirror and ask why. My hunch is that you may already know the answer.

Excessive profits…

I’d venture to guess that all structured settlement companies have done deals that fit the excessive profit definition; however the question is whether or not those are the exceptions or the rule.