Lawmakers thought this requirement would protect people from being exploited by predatory sales practices.

But the advisers often have illegal ties to the companies buying the payments, and these discussions seldom have any impact on the deal, according to a Star Tribune review of more than 1,700 deals in Minnesota. To the astonishment of many clients, the advisers — who are typically lawyers or financial planners — rarely tell them whether they should go forward with a deal.

“It’s not advice,” said Bobbi Jo Smith, who met with advisers twice before selling $107,681 in future payments she would have received for injuries she suffered in a car crash. “They’re just making sure you know what you’re doing and that you’ve looked at all of the paperwork. It’s just a step. You have to do it to get your money.”

Minnesota is one of seven states that insist on this step before a deal can be approved by a judge. Other states allow customers to sign a waiver acknowledging they are declining the company’s advice to seek independent advice.

Under Minnesota law, the advisers are supposed to have no ties to the companies purchasing the payments. But clients said the companies are routinely steering them to specific advisers, and those advisers are typically paid out of the proceeds of the deal — both violations of Minnesota law. Though judges approve the vast majority of transactions, 19 of 1,421 cases that went to a hearing were rejected by Minnesota judges who cited concerns over referrals and financial arrangements, records show. Judges blocked 119 deals for other reasons, primarily because they objected to the financial terms.

In several cases, judges rejected deals when sellers testified that they chose their adviser because the company recommended using them. In one of those cases, the judge noted that someone from the company “was on the line” while the seller conferred with her adviser by telephone. The seller acknowledged that she never met the adviser personally.

In 2014, now-retired Hennepin County Judge Philip Bush denied a deal involving $63,350 in future payments after he discovered that the same law firm had represented a settlement buying company in eight cases, leading the judge to believe there was an “informal affiliation” between the lawyers and the investor. Bush rejected the deal for a lead-poisoning victim who was suffering from cognitive defects and required the services of a guardian, the judge noted in his order.

“In many cases, the independence is a joke,” said Eric Vaughn, executive director of the National Structured Settlements Trade Association, a group that helped craft many state laws governing the sale of structured settlement payments. “If the independence is questionable, then the advice has got to be questionable.”

Rae Bentz, an Ely, Minn., lawyer who handles a few of these cases each year, said he “assumes” his firm is getting referrals from the industry. He also acknowledged that his firm hasn’t gotten paid when judges have denied a deal. But Bentz maintained his clients benefit from talking to him about a deal.

“I generally try to talk to them about how much they are receiving and how much they are giving up,” Bentz said. “I’ve talked a couple people out of it. You have to look at the circumstances.”

Bentz said most customers don’t want his advice.

“They’ve gotten to the point in the process where they have decided they need the money,” he said. “Frankly, I don’t find a lot of them asking whether it is a good deal or not.”

Bemidji resident Mitchell Fay said one of his advisers tried talking him out of selling $41,500 in payments for $25,000 in 2013, telling him it was a “dumb idea.” But he went through with the deal anyway because he wanted to use the money to buy a house. He wound up selling the property a few years later.

“Do I regret it? Yes, I regret every bit of it,” said Fay, who received a six-figure settlement when he was a young boy after an accident blinded him in one eye.

Court records show that judges approved at least eight deals over the objections of a client’s adviser. In one of those cases, the adviser sent a warning letter to his client, who was selling $30,100 in future payments for $14,448. “You are out of work, owe back child support and consequently you are without a driver’s license,” the adviser wrote. “The back child support needs to be paid to keep you out of jail. I am concerned that the discount factor is more than what would be reasonable. … I would suggest that you consider other options.”

Oakdale attorney John Lamey III said he tries to warn his clients about the risks they are taking.

“I always tell people that these guys are sharks,” Lamey said. “They are out to make a dollar.”

Lamey said he told three of his 30 clients to shop around for a better deal, but he said he refrains from telling anybody whether they should go forward with selling their payments.

“I don’t view that as my role,” Lamey said. “My role is to make sure they are using the money for a legitimate purpose and aren’t going to Las Vegas for a wild weekend.”

Lamey said attorneys receive no guidance from the courts or the companies on how to handle these conversations. He said he reads all the paperwork before a client shows up in his office. Those meetings, he said, typically last about 20 minutes. His usual charge: $300.

“We do the best with the skills we have,” he said. “I have no special training. I get no special crib sheet from the companies to go over. I just have developed my own style.”

Lamey said he often asks clients about the injuries that led to their settlements because he wants to know if they suffered a brain injury that might affect their ability to understand the deal. However, Lamey said he was stunned when the Star Tribune informed him that one of his clients — Tim Knaak — had been under the protection of a court-ordered conservator until he was 31 years old. Lamey represented Knaak on three transactions that were approved by the courts, even though a Wright County judge denied a 2008 deal after finding that Knaak was unable to understand the financial implications of the deal because he continues to suffer from a “mental handicap.”

In an interview, Knaak said he didn’t remember anything from his meetings with Lamey. He said he believes the companies took advantage of his handicap. “I think those companies are pretty shady,” said Knaak, who sold a total of $542,140 in payments for $132,922.

“If I would have gotten an idea of Mr. Knaak’s background, I probably wouldn’t have signed off on it — certainly not three different times,” Lamey said.

After talking to the Star Tribune, Lamey said he began checking court records to see if clients have been under the care of a conservator of a guardian. He said companies should be required to collect information on a client’s mental health history so that information can be shared with advisers and the courts.

“It only takes a minute to do a search,” Lamey said. “It’s not too onerous.”