NC Attorney General Sues Annuity Mills
N.C. Attorney General Roy Cooper has sued two California companies,accusing them of fleecing elderly residents out of their life savingsby selling them living trusts and annuities they didn’t need.
Cooperfiled the lawsuit against American Family Prepaid Legal CorporationInc. and Heritage Marketing and Insurance Services, both of Irvine,Calif., for using aggressive sales tactics on elderly consumers. Bothcompanies were sued last month by the Pennsylvania attorney general forthe same tactics.
“What they try to do is to scare seniors intobuying these living trusts and then into buying these overpricedannuities,” Cooper said Monday.
In one case, the lawsuit says, aHeritage agent convinced an 84-year-old man to buy two annuities worth$547,000, using the proceeds of his stock portfolio and anotherannuity. The man ended up paying $175,000 in capital gains taxes, whichwas not disclosed to him. He had to pay fees for cashing in one annuityto make the investments, where if he had waited 12 days, he wouldn’thave had to pay any fees, according to the lawsuit.
In anotherinstance, the lawsuit says, a Heritage agent sold an annuity to a70-year-old woman who had been diagnosed as bipolar and paranoidschizophrenic. The agent took the woman to the bank to withdraw $29,000to pay for an annuity even though she needed the money for her medicalcare, the lawsuit says.
Read more in the Raleigh News Observer.
To report suspected elder fraud or abuse, http://www.wmitchell.edu/elderlaw/topics/abuseAndNeglect/reporting.html
and click on the map to find the toll free reporting number in your state.