
How companies make millions off lead-poisoned, poor blacks - eplanit
http://www.washingtonpost.com/local/social-issues/how-companies-make-millions-off-lead-poisoned-poor-blacks/2015/08/25/7460c1de-0d8c-11e5-9726-49d6fa26a8c6_story.html
======
fiatmoney
Aside from the Justice Preening, this raises some interesting ethical
questions about time preference. I mean, in a lot of cases they understood
exactly what they were doing - giving up some money tomorrow in exchange for
some today. They just made a more drastic tradeoff than, say, traders selling
treasury bonds, but less drastic than, say, the millions of people taking
payday loans, or those same traders if they expected interest rates to rise to
30%. It's unclear what exactly it means to "not understand" the tradeoff -
presumably if you said the words to them they would repeat them back and tell
you they "understand" that this will happen in the future; it's not exactly a
difficult calculation, just an if-then.

Does competency then require some kind of accurate estimation on their part of
future regret? This seems like a really high bar that millions of, eg, high
functioning alcoholics or one-night-stand partakers fail each day.

Does lead screw with time preference specifically? I would assume so, but is
it more or less than would be expected given the effect on general mental
capacity?

How high of time preference is "too high"? Is it unethical to transact with
someone who wants things NOW just a little too strongly, maybe even so
strongly that they don't bother to comparison shop? Do our ethics require them
to be pariahs, even though they're not "incompetent" enough for someone else
to be responsible for their affairs?

Would cashing them in at parity with the estimated present value (which, given
their condition, they're likely to squander over roughly the same time period
they squandered the larger amount) be more un/ethical? Equally?

~~~
lotu
>It's unclear what exactly it means to "not understand" the tradeoff -
presumably if you said the words to them they would repeat them back and tell
you they "understand" that this will happen in the future; it's not exactly a
difficult calculation, just an if-then.

I think the mean these people don't understand they are giving up +70% of the
present value of the settlement. They probably don't understand what present
value means, and figuring out 70% of a large number might not be something
they could do even with a calculator. They do know this is bad and
embarrassing so they will try to cover up their ignorance by saying, "Yes I
understand" even if they do not. I would expect they would be unable to
correctly explain un-assited, and un-promted, why they got a structured
settlement in the first place, how the structured stealement plays into their
everyday finances, why they now think a structured settlement was a bad idea,
and how the plan to make up for the loss of monthly checks in their day-to-day
expensies.

As I side note I feel you could make a convincing argument that alcoholics
should lack legal competency when dealing with matters that involve them
getting alcohol. They routinely do things that I don't think can be called
competent (much less legal) for example putting people they care about at risk
of death by driving while very drunk. We even have special rules for these
people related to drinking and driving namely ignition interlocks, that we
don't require non-alcoholics to use.

~~~
brandonmenc
> I think the mean these people don't understand they are giving up +70% of
> the present value of the settlement. They probably don't understand what
> present value means, and figuring out 70% of a large number might not be
> something they could do even with a calculator.

Cripes, they probably don't even know what the word "percent" means.

These people need far greater protection from the law than they're receiving.

~~~
Lawtonfogle
At what point must they receive protections stronger than that a child gets?
Many 17 year olds know what a percent is. Say the 17 year olds in an honors
math class. Yet we restrict them to the extent they cannot vote nor sign
contracts (with very few exceptions that require parental signatures).

So if we need to apply the same level of protections, does that not also
justify taking away rights like voting (assuming taking it away from educated
17 year olds is justified)?

~~~
brandonmenc
> So if we need to apply the same level of protections, does that not also
> justify taking away rights like voting

In my opinion, yes, though in practice this restriction would probably be
impossible.

------
nostromo
They can sue to get the contract voided, just like anyone with a mental
disability that prevents them from understanding a contract.

The article mentions this, but says that they often aren't incapacitated
enough to void the agreements -- which puts them in a strange gray area. It's
similar to scams that prey on the elderly.

~~~
hkmurakami
I would suspect that they would have to argue their case for incapacitation in
court, which comes with legal fees, which they likely cannot afford.

Perhaps a class action lawsuit with many such victims assembled will be
compelling enough in size that a law firm will take the case on a contingency
basis.

~~~
amenghra
The result of such a class action lawsuit would be a lawyer (or a bunch of
lawyers) making a ton of money and the victims getting a coupon for a happy
meal at the local fast food chain.

~~~
hkmurakami
Yes, that is a very good point. Are there any contingency contracts for these
class action suits where the lawyers agree to a fixed percentage of the
settlement, which would hopefully leave a decent amount for the victims?

Perhaps there can be a "bidding" system if the victims can self organize and
then look for a law firm to represent them -- kind of like how architecture
firms win contracts?

~~~
amenghra
These people unfortunately have a hard time with basic reading/cognitive
skills. Unless the government or a non-profit helps them out they are going to
have a hard time self organizing and pull off the best possible deal.

Besides ethical reasons, it's in everyone's best interest to make sure that
poor people don't get abused in this way because when they end up needing
social services (shelter, food, medical aid, etc.) that help comes from every
tax payer's money.

------
roymurdock
Interestingly enough, the business examined by this article (Access Funding
LLC) is Better Business Bureau accredited. [1] What kinds of businesses aren't
BBB accredited these days?

The owner and CEO of Access Funding LLC, Lee J. Jundanian, started a business
called Rapid Advance LLC in 2005. [2] This company specialized in structuring
advances "on terms that experts say most small businesses, especially
distressed ones, would have little hope of meeting", doing a large amount of
business during the financial crisis. The advances are not considered loans
because there is no set payback period; therefore, "the industry is completely
unregulated, and companies can charge customers whatever they want."

 _Calculating the cost of an MCA [merchant cash advance] is a bit complicated.
Because it doesn’t accrue interest over time, the more quickly one repays the
advance, the more expensive it is.

For example, if a merchant agrees to pay $70,000 for a $50,000 advance, and it
pays it off in six months, the effective annual interest rate is 80 percent.
If paid off in three months, the rate jumps to 160 percent. Pay the advance
off in a month and the rate skyrockets to 480 percent._

Funnily enough, Mr. Jundanian was awarded with the prestigious "Entrepreneur
of the Year Award" by Ernst & Young in 2008 for growing Rapid Advance so
quickly. Clearly they were impressed with his ability to find such a
profitable way to use questionable accounting to legally prey on vulnerable
business owners.

Seems like he's found a new avenue for his talents.

[1] [http://www.bbb.org/washington-dc-eastern-pa/business-
reviews...](http://www.bbb.org/washington-dc-eastern-pa/business-
reviews/financial-services/access-funding-llc-in-chevy-chase-md-235996786/)

[2]
[http://www.bizjournals.com/washington/stories/2010/07/19/sto...](http://www.bizjournals.com/washington/stories/2010/07/19/story18.html)

~~~
jeo1234
In Canada it is a crime to charge more then 60% per annum. I would not be
shocked if the States had something similar on the books. [http://laws-
lois.justice.gc.ca/eng/acts/c-46/page-179.html#d...](http://laws-
lois.justice.gc.ca/eng/acts/c-46/page-179.html#docCont)

Edit: It's a States issue. It looks like Massachusetts has some rules
[http://www.mass.gov/courts/case-legal-res/law-lib/laws-by-
su...](http://www.mass.gov/courts/case-legal-res/law-lib/laws-by-
subj/about/interestrates.html).

~~~
gambiting
Lol. In UK there are short term loans which are publicly advertised as having
an APR of at least 1500%(wonga.com), up to 3500% for larger sums. Fully legal.

~~~
rasz_pl
In PL wonga.com advertises strictly to elderly (using famous older actors for
added nostalgia and trust factor), they intensify ad campaign during holiday
season, 'your family deserves good holiday with great gifts!'.

------
reader5000
Are these actually bad deals? If the payments stop at death of the seller, the
buyer is taking on legitimate risk. Plus all "present value" calculations are
of course uncertain. Ignoring the race drama the author apparently needed to
drive clicks, a different interpretation is that these companies are providing
value to these people in converting slow streams of cash payments into lump
sums of cash.

~~~
dangerlibrary
Whether or not they are good deals is a secondary question to whether or not
the people signing the contracts have any idea what is going on. The article
makes it pretty clear: the legal protections are too weak, and severely
impaired people are signing documents they don't understand.

It's easy to construct scenarios where the closing prices are fair - even
generous. It's also totally irrelevant.

~~~
reader5000
Fair enough. I am not familiar enough with lead poisoning to understand the
degree of mental impairment, but you are getting to a gray area where you're
saying people with lead poisoning shouldn't be allowed to handle their own
finances nor enter contracts etc.

~~~
dangerlibrary
It is both the degree of mental impairment, and the legal protections put in
place. These people ostensibly have an "independent advisor" who makes sure
they understand the settlement. That should be enough, even for an impaired
person who can't read but is capable of basic decision making. But there are
judges who accept a sixty second phone call as sufficient. Even if the seller
is an illiterate person being asked if they understand the ramifications of a
12 page legal document. And even if the "independent advisor" has done dozens
of deals with the buyer before, and has no other clients.

This is a local article. Many of the problems it points out are specific to
the weak legal protections in Maryland. It calls out specific people and
companies, and specific conflict of interest issues. Talking about structured
settlement pricing or mental impairment in the abstract really isn't relevant.
Also, maybe read the whole article before commenting.

------
travjones
This is really sad. Isn't "competence" a necessary prerequisite for entering
into legal contracts?

~~~
x5n1
Pretty much. Entering into a contract with a brain damaged individual who was
not at all educated would get the contract thrown out of court pretty quickly.

~~~
schoen
That sounds, maybe ironically in this context, like a class-action lawsuit
opportunity. Or maybe individual litigation on contingency (to void the
contract for lack of capacity to contract, or another theory).

~~~
jessaustin
Maybe I'm an ignorant jackass for asking this, but how can someone who lacks
competence to enter contracts ever litigate on a contingency basis?

~~~
orionblastar
In the article the same woman falls for a different company to sell her
settlement to, and it gets thrown out of court because she already sold it to
the first company.

If someone has brain damage and struggled with an education, usually a
custodian is assigned to take care of their finances and make financial and
legal decisions for them. In this case it didn't happen, and her name and
phone number is on a list of people who got settlements that these companies
buy and then call and scam out of their settles for pennies on the dollar.

------
powera
This is where your libertarian "unrestricted right to contract" turns sour.

~~~
adventured
Not at all. Valid contracts must pass a minimum bar of consent. There was no
consent granted, the victim in this case is blatantly incapable of giving it.

What occurred is theft.

~~~
ThomPete
Theft defined by what court in the liberal society?

The one owned by the rich people or the one owned by the rich people?

~~~
Crito
You seem to be attacking libertarians for being anarchists.

Would you attack a democrat for being a republican?

~~~
ThomPete
Sorry I was unclear. I mean "own" as in how the rich own the politicians in
the current system. In a libertarian society I have a hard time seeing this
being anything but even less protective of people like those described in the
article.

~~~
mdpopescu
What stops you (in anarchism) from opening a court specifically for poor
people? Why do you think you're the only one worried about them?

------
oh_sigh
Why does this lady have power of attorney over herself if she is "brain
damaged" and can't read or write(presumably due to said brain damage, and not
just laziness).

~~~
IkmoIkmo
Good point.

Sad part is she discussed it on the phone with her lawyer. Good grief... my
brother is a lawyer, if he ever got a call from a client saying a man came
over, bought her steak and would give her a lumpsum of money in return for her
monthly payment contract, all alarm bells would go off. He wouldn't even need
to see the specific contract or have to be aware his client is mentally
challenged to say 'no', first and foremost, followed with 'send it over or
come over so we can review the contract'.

~~~
rgbrenner
_Sad part is she discussed it on the phone with her lawyer._

No.. the lawyer was an "independent adviser" to her. He worked on every single
one of Access 52's deals. Basically, he would call them up, ask if they
understood the deal. That's it.

And that really underscores how mentally incompetent she was. Some random
lawyer calls her up out of the blue, and she takes his advice.

More details about 2/3rds into the article (search for the guys name "Charles
E. Smith" and you'll find the section about the lawyers involved.)

~~~
IkmoIkmo
Makes a lot more sense. Thanks for replying!

------
ThomPete
And this is why we should always remember that "the marke" should serve as our
servant, not our master".

If the logic of the market become more important than the people it's supposed
to serve then why have it in the first place?

Im exaggerating of course but wow.

~~~
duncan_bayne
This isn't a market. Markets operate between consenting adults; these people
lack the mental faculties to count as consenting adults. The buyers here are
actually violating the rights of the sellers.

~~~
srtjstjsj
"these people lack the mental faculties" is inherently difficult to define in
a mutually agreeable way. Mental faculty is special in that way.

~~~
duncan_bayne
Sure. But there are many legal jurisdictions with fairly workable definitions.

------
Spooky23
This is just an egregious example of people abusing the poor and helpless.
Plenty of the landlords who own those building are as bad or worse.

Worse still are the institutional owners who hang onto tenement property to
serve as a buffer.

------
deciplex
> _Still, Borkowski urged stricter legislation and more oversight. “These
> questions you raise touch on fundamental things we are going to be doing
> differently now,” he said. “We want to secure ourselves in the future from
> any potential questions like this again, so we can say, ‘No, that’s not us.’
> ”_

Isn't this an admission of guilt?

~~~
6502nerdface
Not necessarily... In any business there's such a thing as "headline risk,"
distinct from legal or compliance risk. It's where the mere perception of
wrongdoing can be almost as damaging to your business as actual
wrongdoing/noncompliance; anything can be spun as sinister by an unsympathetic
press. So to mitigate headline risk you might actually make your compliance
controls much stronger than legally necessary. I think Borkowski is trying to
say something like his business is fundamentally honest, but the reporter has
raised some serious points of possible misperception about it, and they're
going to make some compliance changes to clarify themselves against possible
misperceptions of wrongdoing.

Of course it's kind of too late if you're finding out about your headline risk
_from a reporter._ And not to defend these bozos.

------
erikb
I agree with all other people who say that she probably may be able to void
the contract if she a) can pay back the money b) knows that it's possible to
void a contract. But that is discussed already enough in the threads here. So
I want to add a new point.

Should she trust such a contract and its maker? I think even if you are a
little brain damanged and unable to read you should have some basic ability to
determine if you can trust someone. I mean he came to her home and gave her
food. That basically screams "I want to F __* you " in one way or another. And
when next he introduces some opportunity you can know exactly that this is
where he's trying to cheat you. It's basic survival knowledge to recognize
that. If you are a young white man, you might not have experienced such kind
of situation before, but this structure of getting tricked is very common and
not too hard to recognize, no matter where you go or what the trick is. After
getting cheated a few times you recognize it as easy as a red light on the
other side of the street that stops you from crossing over. If that girl
doesn't have that much brain capacity she can't live alone. And if she has she
certainly must learn to recognize that.

~~~
dugditches
The second paragraph of the article states she can't live alone:

"She says she can’t work a professional job. She can’t live alone. And, she
says, she surely couldn’t understand this letter."

You can't apply your logic and thought process to someone with mental or
development issues. It's ignorant.

~~~
erikb
Then how could she face that person alone? If you have a caretaker he reads
your mail, he even might answer your phone, and he certainly should see that
not just him and you are sitting in the room, but another dude with a steak
he's feeding you. That's how I came to presume she would have some kind of
autonomous agenda.

------
DanielBMarkham
Kudos to the WP for such a good investigative piece. Great job, guys.

I've been thinking about this problem for several years, ever since I saw my
first late-night TV commercial with lawyers offering quick cash in return for
structured payments. It was obvious that these folks were not pitching a
financial service for people to think about very seriously before taking; they
were pitching fast cash for people who can't manage their money.

Taking financial advantage of the cognitively-impaired is a very thorny
problem. I think it's easy to come up with some kind of armchair policy that
sounds good but would cause more problems than it would solve.

But hey, this is the internet, so everybody gets to take a whack at it. This
is my take: if you're receiving a structured settlement for permanent
cognitive damage, your cognitive damage does not go away simply because you've
decided to take all the money in a lump sum. You end up stuck with the same
problem, only now you've lost any chance of remedy. So perhaps the thing to do
is to make structured settlements a legal requirement of the lawsuit and not
simply a civil one. In other words, the judge rules that party X will pay
party Y so much per month for so many years _and that debt is not transferable
by party Y_. They're stuck paying them so much, and they're stuck paying them
so long. A check must show up each month made out to Y (and Y must have full
control over what to do with it)

Y can still make bad financial deals, but they get that money every month no
matter what. If Y owes a bunch of people money? They can stand in line and
wait on Y to decide how they want to spend their monthly allowance. It's not a
debt in the traditional sense, it's an order for one bunch of folks to give
another bunch of folks money every so often.

Probably a lot of problems with this solution also, but something needs to be
done here. This is a terrible situation.

EDIT: change in text to correctly source the article

~~~
dangerlibrary
The article is in the Washington Post, not the WSJ.

~~~
DanielBMarkham
Corrected

------
mirimir
The big winner overall in this sad story is arguably the lead industry. They
escaped liability for many decades.

------
frogpelt
Total click-bait headline from the Washington Post? Wow.

It absolutely makes no difference what race the poor people are.

~~~
omegaworks
When the country has systematically denied access to capital to a certain race
of people, and continues to support and legitimize this practice, it
absolutely makes a difference what race these people are.

Black lives matter.

~~~
monochromatic
All lives matter.

~~~
omegaworks
>It is not simply said as a matter of truth or a statement of values. Instead,
it's a rebuttal to the statement "Black Lives Matter."

>Instead of communicating a love for all beings, "All Lives Matter" are words
of negation, repudiation, and refutation.

[http://www.huffingtonpost.com/david-bedrick/whats-the-
matter...](http://www.huffingtonpost.com/david-bedrick/whats-the-matter-with-
all-lives-matter_b_7922482.html)

~~~
monochromatic
I will not have words put in my mouth by the ridiculous Huffington Post, of
all sites.

------
argklm
And the most absurd thing is... It's all legal.

I wonder how this state has forgotten to protect who absolutely need
protection. They are people, and I know it, but severe mental impaired persons
selling their "possessions" to shady companies, it's not the best thing to
leave unsupervised.

The state also seems to consider the economic aids as a salable good. They
should be shielded by these companies. Mental impaired persons are the weakest
in resisting this type of aggression. The aid should be destined for the well
being of people and not their ruin.

------
ccvannorman
The Dickishness human gene strikes again.

Solution? Maybe the people who live in those cities can sue these companies in
a class action lawsuit for grievances. I guess that's what courts are for.
Unfortunately, "who's going to do it?" I sure as heck don't have time or
energy for it. :/

------
ssanders82
It would be helpful to know at what interest rate they are discounting future
payments. When you're looking 50 years in the future, even a few points makes
an enormous difference.

------
doki_pen
A highly visible, more competitive market would go a long way to making things
more equitable. Someone should make settlement.ly.

~~~
halviti
Victims that likely don't use the internet or understand what a settlement is
aren't likely to find such a service very beneficial.

------
scotty79
Why is something like disability insurance checks even transferable?

------
emodendroket
There's a special place in Hell for people whose job is to trick brain-damaged
people out of their settlements.

~~~
eli_gottlieb
Unfortunately, there is no Hell, so we'd better do something about the issue
in _this_ world.

~~~
PhasmaFelis
Nice to see that atheists can also be humorless and overly-literal.

Edit: Honest question to downvoters: You are aware that "a special place in
Hell" is a figure of speech, yes? That emodendroket was not actually saying
"no need to fix this problem, God will take care of it"? Or are you perhaps
interpreting my post as a knee-jerk dig at all atheists, as opposed to just at
eli_gottlieb for being overly pedantic?

~~~
codezero
I think it's good to remind people that if we really don't approve of a
behavior or crime, we should seek to reconcile the crime accordingly here and
now, and not write it off with a passing phrase (it's a phrase, not meant
literally), or with possible religious connotations (kind of mean it
literally)

------
paulhauggis
"She remembered a nice, white man. He had called her one day on the telephone
months after she’d squeaked through high school with a “one-point something”
grade-point average."

#Nottheonion

If the users here on HN can't see that this article is heavily biased and
racist, there's something wrong.

It's this sort of thing that leads me to believe that 'smart' people aren't
all that smart and can easily be manipulated by the media and people that
power-hungry politicians.

 _cough_ Global Warming _cough_

This article is trash and shouldn't even be here on HN.

~~~
DanBC
Can you point out a biased sentence?

I'm going to ignore your global warming comment. At some point you're going to
have to accept that the vast majority of scientists accept that climate change
is real and that the vast majority of people who deny the reality of climate
change are not scientists and have misunderstood the science.

~~~
paulhauggis
"At some point you're going to have to accept that the vast majority of
scientists accept that climate change is real and that the vast majority of
people who deny the reality of climate change are not scientists and have
misunderstood the science."

Like I said, I never said Climate change isn't 'real'. The dispute is how much
the climate is changing and what is causing it.

The vast majority of climate scientists:

1) It would be career-suicide to express any other opinion about climate
change besides the current narrative. Many have already been fired for doing
so. I was in Academia for many years and pretty much everything has to do with
politics.

2) Rely on the same sets of data. Confirmation bias is a real thing. If you
even bothered to look at the website I mentioned, you would see that some of
the main studies used for climate change proof are not peer-reviewed.

If 'science' means research without peer-review, completely invalid studies,
the refusal to admit studies that are wrong, silencing opposition, and using
politics to bully the opposition, I will agree.

However, this isn't science and if it was just science as you say, we wouldn't
have politics, lying, and outright fraud involved in so many instances.

Al Gore, for instance, is now a wealthy man for essentially getting laws
passed to force companies to buy carbon credits from his own companies. He
pushed 'Global Warming' as 'Settled science' and the science community
accepted it.

The pope came out a few months back and backed climate change. Everyone
pointed to this as some sort of proof. They ignored the fact that the pope
also talked about how trans-gender people are not seen as human in the eyes of
god.

If you can't see the problem here, you don't really understand science
yourself.

------
S_A_P
Could there be a more inflammatory click baity title for this?

~~~
codemac
Inflammatory?

Unfortunately, some things will incite a rise within any reasonable person,
regardless of title. This is definitely one of those articles.

Not to mention the title is concise and accurate, while summarizing the
article well.

~~~
ps4fanboy
Are they targeting blacks or poor people with settlements? I didn't see
anything in the article to support the claim that its racial.

~~~
ThomPete
Does it matter? It's black people who are affected by it.

~~~
Frozenlock
Yes, it matters. It's poor practice for a journalist to include the race,
sexual orientation, religion, etc... of someone if it has nothing to do with
the story.

~~~
auntienomen
Are you more bothered by the fact that the title might not be perfect, or by
the fact that a bunch of sleazy lawyers are ripping off disabled people?

~~~
brazzledazzle
It would be unfair of me to attribute this to the person you're replying to,
but I've noticed that on sites like HN and reddit there seems to be a strange
desire by some people to try to make things not about race, gender or sexual
preference as much as possible. It's as if they are somehow lessened or hurt
by it but I'm not sure how. Perhaps a feeling of guilt and wanting to deflect
it drives that behavior. But it is present in the comments of a lot of
articles that bring up or imply race, gender or sexual orientation is a
factor.

~~~
pavedwalden
I recognize the tendency that you are referring to.

But in this case, it seems to me that race is more of a correlation than a
causation. Yes, urban poverty is very entwined with blackness but, unlike
things such as police brutality or criminal sentencing, it's not clear that a
white person in the same position wouldn't be victimized in the same way.

I don't object to the inclusion of "Black" in the headline, but it did strike
me as odd in the same way that an article I recently saw elsewhere did. The
headline was something like "This female chemist... yada yada". The article
itself was about her work and didn't particularly mention her gender or any of
the inequities she may have encountered. It seemed odd not to just call her a
chemist, since you wouldn't specify a 'male chemist' unless there was a
reason.

In the greater cultural context it's clear why this extra information was
included and it's interesting to think about what's implicitly being
communicated. But since superfluously mentioning race or gender would be quite
unacceptable in so many other contexts it's a little surprising to see it
included in the headline.

~~~
brazzledazzle
I think in the context of institutional racism (what some snidely call the
"academic definition" of racism) it's not as striking to see it in the
headline. The issue of race in our country is much more complex than
individuals and their interactions with each other. Both are important, but
the assumption seems to be by the people doing the objecting that the only one
of consequence is personal/individual racism between people.

As far as the chemist goes, I think that despite the polite societal norm to
refrain from mentioning it when it's irrelevant (which shouldn't go anywhere
in my opinion) in the context of a news story we should mention it more.
There's a serious issue with getting women into STEM fields and surfacing it
even if it's irrelevant might deter the perception by young women and girls
that they should avoid those fields. But that's my ignorant opinion without
any studies to back it or anything. I could be entirely wrong.

~~~
pavedwalden
I don't know if you'll see this (does HN have a reply-notification feature?)
but I really appreciated your response and (I presume, since I was at -1 when
the thread settled down) the upvote that sent my comment back to "0 points"

This comment thread was really discouraging and it meant a lot to me that you
were willing to just talk about a small point we have different perspectives
on.

~~~
brazzledazzle
No built-in notification unfortunately but I do check for them once a day or
so. I wouldn't be surprised if it actually helps decrease vitriolic slap
fights since we aren't instantly notified a la reddit.

But yes, that was me that brought you back. I hate seeing calm discourse get
downvoted simply because of disagreement. I actually like that I don't have
that ability. Kind of refreshing. I'd like to think the karma requirement
would help deter abusive voting but I see enough of it that I'm not so sure
it's as effective as it could be. Better than nothing though, I suppose. But
anyway, you're welcome. It's kind of funny but I felt the same way about the
comments and your reply was really encouraging.

------
vsync
> In a lawsuit dismissed in March, Access Funding accused Blumenfeld of
> interference with business practices and unjust enrichment.

Wow.

~~~
sachingulaya
This is a substantive claim in spite of the accuser. The independent advisor
should not be helping their client solicit other bids...not very impartial.

------
zecho
Fascinating businesses. I bet some smart hacker could totally improve this
process, though.

~~~
emodendroket
Maybe they could bring in Bitcoin somehow.

------
randyrand
How relevant is the lead dialogue? My intuition says it's mainly to add to the
emotional narrative rather than the tangible one. But I'm curious if its
actually a apt point. Anyone have any concrete info either way?

~~~
IkmoIkmo
It's relevant because it's the reason she's getting $1k in payments in the
first place, as a settlement from whoever was responsible for the lead. It's
not that she sold welfare payments and wants to explain away the bad decision
with lead. It's that she's a damaged person (lead is a neurotoxin), got
settlement payments, and made a bad decision that's more understandable in
that context. Without the lead dialogue, she made a bad decision she could've
prevented herself you might be able to argue. With the lead dialogue it's, on
a mental level, probably quite similar like stealing candy from a baby. Now
imagine the baby has to live off of settlements for decades, which have just
been reduced by a gigantic amount. Now consider what it means in 5 years when
the money's gone (even if she spent as frugally as normal, living on $12k per
year tops), and you know she's going to either become homeless or severely
dependent on the state or likely a combination of both. That's horrible for
her first and foremost, and it doesn't help us or our society, either. Lead
played a big role in this. Hell even outside of the 'bad decision', a normal
person who lost out on $1m in benefits could still go to work, live a normal
life. She can't because she's damaged by lead. (it doesn't talk about it
deeply but it says for example she can't live alone or work).

------
djrogers
What struck me wasn't that this was a bad deal (it isn't) but that it's a bad
deal for _them_. If I personally, being of sound mind and making a good wage,
were offered a similar buyout of a structured settlement I'd take it.

The future value of 63k with 7% compounding earnings over 35 years easily
outpaces the value of the monthly payments. And over that long a time horizon
7% would be easy to get - it's well under the market growth for any given 35
year period.

But that's me - I don't need the money to live off of every month, i don't
have a disability that makes me unemployable, and I don't need those checks
every month.

If those were my circumstances though? I'd be pissed!!!

~~~
harryh
Congratulations djrogers! By sucking at math you just cost yourself nearly 1.5
million dollars in retirement savings!

[https://docs.google.com/spreadsheets/d/1y3PFiRhnixOcqeVrxZ2j...](https://docs.google.com/spreadsheets/d/1y3PFiRhnixOcqeVrxZ2jc0f9Hf6ZAoJeGsjZ_NNSWd4/edit#gid=0)

I think one of the kind men from Access Funding would like to buy you a steak
dinner.

~~~
IkmoIkmo
Your monthly interest rate isn't quite right, it's 7% / 12, rather than
1.07^(1/12).

i.e., if the annual interest rate is 100% (doubles every year), then it'd be
incorrect to say the 6-month interest is half that (50%). As two terms of 50%
would be a 125% increase, not 100%. To get to 100% you'd need two terms of
41%.

If you apply this to the monthly rate it drops by a little. Compounded over
all those years, the total amount drops to by about 6%. As the one value drops
by a larger amount in absolute terms, the earnings difference actually drops
by about $50k.

Either way, it's still a ridiculous difference and your point fully stands.

~~~
harryh
Ya, good point. I was being a lil' quick and dirty when I put my spreadsheet
together. Fixed.

------
maerF0x0
No one would be telling sob stories if they thought that they might pull a
Warren Buffet w/ their payout. $60k was more than enough to get buffet to
billions. Maybe the company used the wrong discount?

Really roughly those discounts seem pretty generous, they're approximately
stock market investment rates. Meaning if the poor recipients put the money in
the "market" (maybe not this week) they'd average the same amount of total
payout.

~~~
IkmoIkmo
Not at all. Try doing 60k at a 7% market rate (which is optimistic by the
way). You get to about 600k. Now value the monthly payments invested in a
similar manner, you get to around $2m. It's a gigantic difference. And no not
even Buffet had the returns necessary to make money out of this (which is an
average of > 23% annual returns for 35 years).

This isn't some government agency giving you the approximate lifetime value
upfront as a way to offer choice. It's a for-profit business looking to cash
in on the difference, not a charity, not a break-even operation. They're there
to make as much money as possible. Doesn't take much to assume they're not
going to be 'approximately stock market investment rates', and if you look at
the numbers, surprise surprise they aren't anywhere near it because it
wouldn't make them any money.

~~~
maerF0x0
> It's a for-profit business looking to cash in on the difference, not a
> charity, not a break-even operation. They're there to make as much money as
> possible.

Like most/all businesses?

They're selling a product, whats being disagreed upon is the price. My back of
envelope calcs suggested they were getting about market rates (7-8%) but i
also admit that I am not well versed in those maths.

------
aaron695
I'm surprised that people buy into this rubbish that lead paint has actually
caused these health issues.

True, irrelevant point to the article but points to a broken system on many
levels including understanding and correctly dealing with mental health
issues.

~~~
mirimir
The epidemiology is solid. Some cohort studies ran for decades. They followed
lead levels in blood and bone. They tested intelligence and documented
behavior. They tracked educational and criminal history. The neonatal brain is
exquisitely sensitive to lead.

~~~
aaron695
And this is why juries don't work.

It is probably banging my head against a brick wall, but seriously whole
generations had lead based paint and lead products. Rich and poor.

It's even in the water supply -
[http://www.slate.com/articles/health_and_science/medical_exa...](http://www.slate.com/articles/health_and_science/medical_examiner/2004/05/heavy_metal.html)

But these people with lawsuits had these enormous effects only thanks to lead,
right.

Even the whole lead in petrol thing is up in the air, we are not sure if it
has made a difference.

These issues are around poverty, not magical beans like evil 'lead'.

~~~
DanBC
> Even the whole lead in petrol thing is up in the air, we are not sure if it
> has made a difference

No, that's wrong. We know lead in petrol was very harmful to a lot of people.

The thing that is "up in the air" is whether lead in petrol was responsible
for increased crime rates, especially increased violent crime rate; and
whether removing lead feom petrol was responsible for the reduction in crime
rates.

It's not an outlandish bizarre hypothesis because we know how harmful lead in
atmosphere is.

