By Colleen O'Connor-Grant
July 24, 2008
American Equity Investment Life Insurance Co. agreed to a $16.4 million settlement involving claims tied to abusive annuity sales that targeted the elderly.
The class action lawsuit against the Des Moines, Iowa-based company charged that agents sold deferred annuities to elderly clients as part of a living trust scheme. Even though many were near their life expectancy, many of the annuities sold had 20-year surrender periods, and the policies carried substantial surrender chargers for early withdrawal.
Agents, the suit claims, would persuade an elderly client to buy a living trust using a specific fear tactic—that their assets would wind up in probate court, which was costly and not in their family's best interest.
However, the suit claims that American Equity agents were working in concert with Advanced Legal Marketing Services and Addison Insurance Marketing, a Dallas-based insurance and legal marketing firm.
Once that trust was purchased, the elderly clients were again contacted, this time by agents from the marketing company, who pretended to be attorneys of the law firm. They counseled the elderly clients to sell their current investments and instead purchase the deferred annuity from American Equity.
VERY typical. In fact, most of us at "Annuity Scammers of America, Inc." can do this one in our sleep.
Holy , the scammers and cons never cease to amaze me. Whether they appear as a nice young person concerned about the elderly , a pleasant understanding voice over the phone or a simple e-mail requesting help to move monies from a foreign bank account.
I'll bet that the executives of the company have had past histories in other scams ie. aluminum siding , house repairs , MLM sales and a host of other questionable business activities. On a side note , where were are the Regulators are this one?