Hungry Coyotes

Dear Dr. Per Cap,

My tribe just finalized a major land claims settlement with the federal government. Some of the money will be given out to tribal members as per capita payments. I am looking forward to getting about $50,000 in a few months or so. The problem is I really need the money now. Someone called me and told me they can give me the full amount now, minus some processing fees, if I just sign a few forms. Is this a good deal?

Hanging in There

Dear Hanging in There,

Hmmmm, something about that sounds suspicious. Not to put too fine a point on it, but I think there are some hungry coyotes circling. The fact is, recipients of large settlements are regularly targeted by professional scammers who know about these payments and may encourage you to sign up for all kinds of financial products, including loans against your settlements or early upfront payments. But beware – things are not always as they seem!

Early payments, or loans against the payments, are usually not a good idea. This is because there are often very high fees and interest rates associated with these products.  So read the fine print, get someone you trust to read the forms, and get advice before signing anything. Sometimes these offers for advance payments are outright scams, so be on the lookout for anything that appears fishy or too good to be true.  If you feel you have already been a victim of a scam, call the Federal Trade Commission at 877-382-4357.

Another thing to keep in mind is that there might be a significant tax penalty associated with receiving an early payment. Often times, your settlement payment is tax-free, but if you get an early payment through one of these brokers, you may have to pay taxes on the payment – more lost money. So be cautious.

But the big issue is why you feel the need to get the money now. Times are tough all over, and many of our families are struggling financially. But think about whether you can hang in there, or take a loan from another source, because there is no reason to lose money if you don’t have to.

Congratulations on getting the federal government to honor its treaties and pay restitution for past misdeeds. Your tribe has earned this money. This is a historical event, and is mostly likely a one-time opportunity. I hope things turn out for your family, and you can continue to hang in there until you get your settlement!

Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. This content does not constitute professional and/or financial advice, and Dr. Per Cap is not a licensed investment advisor. To send a question to Dr. Per Cap, email