Gallagher Issues Emergency Orders against Ohio Firm, Agent for Scamming Florida Seniors
CONTACT: Nina Banister or Jeff Takacs
TALLAHASSEE – Tom Gallagher, Florida's chief financial officer, announced today that the Department of Financial Services has uncovered another scam seeking to lure Floridians into buying potentially inappropriate financial products. As a result, Gallagher is again warning consumers to "Verify Before You Buy."
Earlier this month, Gallagher ordered Ohio-based Investors Union, LLC and its managing member, Peter J. Bonnell III of Medina, Ohio, to immediately stop sending misleading postcards to Florida seniors bearing the word "NOTICE" and advising consumers that they "may have an annuity that has reached the end of its surrender period." When recipients call a toll-free number listed on the postcard, they are not given any information regarding their own investment accounts, but are instead asked for personal financial information and advised they should set an appointment to review their existing annuities and other investments.
"These deceptive practices against our seniors in attempts to manipulate them out of their hard-earned savings will not be tolerated", said Gallagher, who oversees the Florida Department of Financial Services. "I commend the investigators who discovered these activities early on before too many seniors were scammed."
An annuity is a contract in which an insurance company makes a series of payments that provide primary or supplemental retirement income while the annuity holder is alive. Most annuities have a surrender period during which the holder would pay an extra service charge for withdrawing money beyond a set amount.
Gallagher ordered Investors Union, LLC and Bonnell to stop engaging in unfair trade practices and said both now face formal administrative charges that could lead to revocation of their Florida licenses. Investors Union, LLC also does business as Annuity Service Center, Insurance Service Center, Information Service Center, and Cold Solutions. Eight other states have now taken similar action against Investors Union and Bonnell.
Florida is currently home to more than 2.9 million Floridians over the age of 65, and Gallagher said the state's senior population is projected to grow by as much as 30 percent over the next several years.
As CFO, Gallagher implemented a "Verify Before You Buy" campaign using websites, billboards, radio ads and various news shows and publications urging Floridians to protect themselves in financial transactions. He also created a Senior Resource Center website, at www.flseniors.net/, to help seniors with the diverse questions and financial challenges they may face.
Also, in response to calls and letters from hundreds of seniors robbed of access to their savings because they were convinced to liquidate CDs, stocks and savings accounts to fund annuities, Gallagher pushed for legislation that passed in 2004 requiring agents to document the basis for selling annuities to seniors and also gave the department authority to take corrective action if a company or agent violates the law.
Gallagher is again urging Floridians and especially seniors to take the following precautions to avoid becoming a victim of a financial scam:
• Do an assessment of your financial means and investment objectives.
• Understand that all investments involve risk: generally, the higher the return, the higher the risk.
• Ask the sales agent (broker) about commissions, fees, penalties, sales charges and any other costs.
• Ask as many questions as you want and take notes. Walk away if they avoid your questions.
• Take your time. High-pressure sales tactics will rush you into an unwise decision. A sound investment will be just as good tomorrow or next week.
• Document all transactions.
• Carefully read and understand documents before you sign them.
• Ignore "inside information," "hot tips" and "rumors."
• Hang up on "cold calls" from strangers.
• Beware of "bonus" interest rates as they are usually limited in duration and have strings attached.
• Be cautious of sales pitches that claim you will "recoup" all penalties with the higher returns of a new policy.
• Remember: if it sounds too good to be true, it probably is.
Anyone who believes they may be a victim should call the department's Consumer Helpline at 1-800-342-2762 or log on to www.fldfs.com to file a complaint.