Yes. “Factoring” companies buy structured settlements from injured parties. In return, they pay the injured party a lump-sum payout. However, factoring companies’ high fees and discounting practices often leave the injured party with only a small percentage of the original settlement and an insufficient lump sum that can be rapidly depleted.

In 2009, a California law (SB 510) was passed that gives consumers a better understanding of the costs associated with selling their structured settlements, so they can make a more informed decision about whether selling the annuity is worth the high costs and discounts that come with the sale. For SB 510 text, visit this link.