Questionmy stepdaughter was recently in a car accident.after a few months the lawyers settled,they made her sign some papers and told her that she would have to wait 7-10 days for the check to clear the bank.they showed her a copy of the check minus their expenses.Is this normal practice or are they collecting interest of her money.
AnswerDear Curtis,
Congratulations on getting a personal injury settlement for your daughter.
YES, someone is collecting interest on her money: it is the bankers and the insurance industry, and it happens to the tune of HUNDREDS OF MILLIONS OF DOLLARS EACH DAY.
The attorneys cannot disburse until the check clears their trust account. The insurance company has to approve of the draft after it is deposited. Even then, the bankers will not show the money in the attorney's trust account for ONE FULL BANKING DAY.
So, if the draft is deposited on June 15th, and the insurance company approves payment of it after seven working days, on June 27th, then the banking industry gets to keep the money one full day, and it will not show up in the attorney's trust account until June 29th.
It is a strategic and purposeful decision on the part of the insurance industry to keep every dollar to the last possible day. As an industry, they have hundreds of millions of dollars earning interest each day that should have been paid out to injured persons.
Insurance companies, NOT TRIAL LAWYERS, are the ones abusing the system.
You have been listening to your President for too long. He has you all worried about trial lawyers when his cash cow buddies make off with the riches.
Let me explain. The insurance industry is our nation's wealthist group. One way they accomplish that is to rake in profits by using other people's money for as long as they can.
I was a founder of a small community "national" bank. The time value of money can mean a lot even to a small outfit like ours. Whenever we took in $10,000 or more, we immediately dispatched it accross the street to our FED depositary and thus we gained one day's interest on it.
You would be amazed to see how much bankers rake off the public by not showing a deposit of any big check for just one banking day. It is HUGE, and they all do it as part of their business practice.
It is frustrating for the attorneys because all they can do is deposit the draft and wait. 7 to 10 business days is the gold standard. I have had to wait OVER two weeks for some insurance doofus to clear a draft more times than I care to remember.
I hope this does answer your question and also give you some insight as to just what abuse is taking place by our highly admired insurance and banking industries.
Best Wishes,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
Best Wishes,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
