Marketing of Annuities to Senior Citizens Challenged
A national class-action lawsuit has been filed which may affect how annuities are marketed to senior citizens. Some believe that the case could be just the first of many other similar lawsuits against other financial services companies.
The class action complaint alleges that the sales practices of AmerUs Group Co., a publicly traded company on the New York Stock exchange (AMH), AmerUs Life Insurance Company and its affiliates are in violation of the federal Racketeering Influence Corrupt Organizations Act (RICO).
According to the complaint, the companies used deceptive marketing of estate planning services to obtain the financial information of seniors in order to target them as purchasers of deferred annuities. The complaint also alleges that in many cases the annuities have maturity dates well beyond the senior's life expectancy and have significant surrender charges. For example, the lead plaintiffs, Edward and Gloria Inferrera, who were 78 and 74 years of age, respectively, when they were sold two deferred annuities. Both annuities are scheduled to mature in 2029, well beyond the respective actuarial life expectancies of the Inferreras at the time they purchased the annuities.
The filing of the complaint is merely the start of what will be a very long process. But if the plaintiffs eventually succeed, the defendants could be facing huge damages. The RICO law allows any person who succeeds in establishing a civil RICO claim to automatically receive a judgment in the amount of three times their actual damages and to be awarded their costs and attorneys' fees. A national class action, with potentially thousand of class members, adds significantly to the defendants' exposure.
Richard Habiger is an estate planning and elder law attorney. You may contact him at 618-549-4529 or Richard@HabigerElderLaw.com.
1808 Clark Street, Carterville, Illinois 62918
Toll Free: 800-336-4529
1808 Clark Street
Carterville, Illinois 62918
Phone: (618) 985-4529