Consumer eViews

         Volume 5, Number 12, March 21, 2008
Across Florida many people are finding the American dream of owning a home is slipping through their fingers. For many of these Floridians, the financial guidance and assistance needed to navigate the system will come too late. Through her work on the Financial Literacy Council, Florida Chief Financial Officer Alex Sink is focused on helping Floridians make better financial decisions and find the resources necessary to help assist them with their financial matters.

On Monday, CFO Sink will address the council at their meeting in Tallahassee. During her speech she will highlight the need for increased financial literacy among young people, working adults, seniors and small businesses.

For more information on CFO Sink’s Financial Literacy Council or Monday’s meeting, please visit

Legislation targets agents using predatory annuity and life insurance practices against seniors

Florida Chief Financial Officer Alex Sink congratulated members of the Florida Senate’s Banking and Insurance Committee for unanimously passing legislation (PCS/SB 2082) that comprehensively addresses the issue of annuity fraud, including strengthening penalties against agents who target Floridians, especially seniors and the mentally-disabled, using predatory annuity and life insurance practices. CFO Sink has been working with Senate President Ken Pruitt (R- Port St. Lucie) and State Senator Michael “Mike” Bennett (R-Bradenton) to better combat annuity fraud, which is investigated and administratively prosecuted by CFO Sink’s Department of Financial Services (DFS).

“We need to deter and punish those who commit financially devastating crimes on Florida’s seniors,” said CFO Alex Sink. “I applaud Senate President Pruitt and Senator Bennett for their leadership and for working with me to reduce this widespread and growing problem.”

Florida consumers, and especially seniors, are commonly targeted through the use of deceptive life insurance and annuity sales practices known as “twisting” and “churning.” Twisting occurs when an insurance agent knowingly makes misleading representations or material omissions regarding insurance policies to induce a consumer to take out an insurance policy with another insurer. Churning is similar, but involves the surrender of a current policy to buy a policy from the same insurance company.

Specifically, the legislation makes twisting and churning a third-degree felony, and in instances where a pattern or practice exists of victimizing consumers age 65 and older or who suffer from a mental incapacity, penalties under the proposed legislation are increased to a second-degree felony. The bill also prohibits insurance agents from submitting applications or policy-related documents bearing fraudulent signatures to insurers, making such a violation a third-degree felony.

Consider the story of Virginia, a 75-year-old Boynton Beach consumer who lived alone and suffered from undiagnosed dementia. In 2005, an insurance agent knocked on Virginia’s door with the goal of selling her an annuity. By the time the agent left Virginia’s house, he had caused her to liquidate six fully-liquid in-force annuities that Virginia could have accessed in full without penalty at any time had she or her family needed those funds to pay for her living or medical expenses. Because of this unscrupulous agent’s actions, Virginia used her already-liquid funds to purchase new annuities carrying 15 years of surrender charges as high as 19 percent. DFS prosecuted the agent for his actions against Virginia and other consumers. The agent lost his license and was ordered to pay $40,000 in administrative penalties.

“This important legislation will go a long way to protect our Greatest Generation," said Senate President Pruitt. "I hope this bill sends a shudder down the spines of those who try to deceive and confuse our seniors out of their hard-earned savings.”

The legislation also strengthens suitability criteria and requires increased disclosure from the agent selling the annuities or life insurance policies. The new suitability criteria will require agents to establish an objectively reasonable basis that the policies they recommend are suitable for the consumer, and to document their suitability determination in writing prior to making any sale. The agent will also be required to disclose important information about the new product, including a comparison of the consumer’s current and proposed new policy, and to document for the consumer any surrender charges he or she will suffer as a result of the proposed transaction.

“When I see citizens being taken advantage of by unscrupulous agents, I think it’s time we in the Legislature step up to ensure that the citizens of Florida are protected,” said Sen. Bennett.

During the past several years, DFS has witnessed a growing number of cases where Florida seniors have been persuaded to purchase a life insurance or annuity product that is harmful or financially devastating. DFS opened 351 investigations related to annuity transactions during the 2006-2007 fiscal year, a 41 percent increase over the previous year. Since July 1, 2007, DFS has already opened more than 260 annuity-related investigations, which trends to a 58 percent cumulative increase since the 2005-2006 fiscal year.

PCS/SB 2082 will now proceed to the Senate General Government Appropriations Committee before it heads to the Senate Floor. Companion House Bill 1003, sponsored by State Rep. Clay Ford (R-Pensacola), has been referred to the House Jobs and Entrepreneurship Council.


The Financial Literacy Council will meet on the 22nd floor of the Florida Capitol to hear CFO Alex Sink present her policies, ideas and goals in a financial literacy state of the state address. The public is encouraged to attend, on Monday, March 24, from three to five p.m.

As Florida’s chief financial officer, part of the job is to help promote smart financial decisions for residents.  As such, a top priority is helping to educate consumers on important financial issues.

Financial literacy education is an essential service for the people of Florida. Together, we can lift Florida’s economy higher, ensuring all Floridians have the tools necessary to adequately provide a more secure future for their families.

The Financial Literacy Council, authorized in 2006 by HB 825, was created to study the financial problems that affect consumers, particularly young persons, seniors, working adults and small business owners, which arise from a lack of basic knowledge of financial issues. 


Florida Chief Financial Officer Alex Sink applauded the Florida House Committee on Financial Institutions for unanimously passing House Bill 1003, sponsored by State Representative Clay Ford (R-Pensacola), which addresses annuity fraud and strengthens penalties against agents who target Floridians, especially seniors and the mentally-disabled.

“Deceitful, manipulative agents are not welcome in our state,” said CFO Alex Sink. “I thank Rep. Clay Ford and his House colleagues for their support of this good legislation to provide harsher punishments for those who commit financial crimes upon Floridians.”

HB 1003 will now proceed to the House Jobs and Entrepreneurship Council, before heading to the House Floor. The Senate Companion, PCS/SB 2082, is sponsored by State Senator Michael “Mike” Bennett (R-Naples) and was passed by the Senate Banking and Insurance Committee Tuesday.

Money-Smart Idea of the Week

Idea: Spend less than you earn 

If you earn a dollar and spend a dollar fifty, it is time to analyze how you are living. Big earners and small earners alike succumb to the allure of overspending - between kids, housing, college costs, cars, vacations - people simply cannot keep up much less get ahead.

The idea of saving money is lost in the attempt to stay afloat. Modify your standard of living to fit your income. Make a dollar and spend fifty cents, then save the rest and you will be on the way to a more secure financial future.

For more financial savings tips click here


Florida Chief Financial Officer Alex Sink announced the conviction of a Miami-Dade County man on Personal Injury Protection (PIP) fraud charges.

Wilfred Cyriaque, 57, pled guilty to involvement in a staged accident ring in South Florida last week and was sentenced to 54 months in prison, followed by five years of reporting probation. As a condition of his plea agreement, he was also ordered to pay restitution of $329,366 to the following insurance companies: Allstate, Direct General, State Farm, Bristol West, Illinois National/AIG and Budget Rent-A-Car.

“Insurance fraud costs us all more, and we will aggressively investigate anyone suspected of defrauding others,” CFO Sink said. “I commend our investigators for their work on this case and encourage their continued pursuit of criminals who take advantage of others by committing insurance fraud.”

Cyriaque was the suspected ringleader of a 24-person staged accident ring, and in 2005 was charged with 51 counts each of insurance fraud and grand theft, four counts of staging an accident, and organized scheme to defraud. Investigators believe Cyriaque may have staged as many as 90 crashes.

The charges stem from investigations by the Department of Financial Services’ Division of Insurance Fraud (DIF), a sworn statewide law enforcement agency responsible for the investigation of insurance fraud. DIF made more than 800 insurance fraud-related arrests in the last fiscal year.

Insurance fraud in Florida has been estimated to cost Floridians as much as $1,400 a year for the average Florida family. The DIF investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance. Depending on the estimated loss amount, the department will pay up to $25,000 for information directly leading to an arrest and conviction. Anyone with information about this or any other suspected insurance fraud is asked to call the department's Fraud Fighters Hotline at 1-800-378-0445 or log on to Complaints can be tracked online.


Florida Chief Financial Officer and State Fire Marshal Alex Sink applauded the Florida House Committee on Financial Institutions for unanimously passing House Bill 1041, “Fire Prevention and Control Bill.” CFO Sink’s legislation is sponsored by State Representative Luis Garcia, Jr. (D-Miami Beach), a retired Miami Beach fire chief, and enhances the State Fire Marshal’s authority in arson investigations and related crimes and improves requirements for firefighter training and certification.

“I thank Rep. Luis Garcia, Jr. and his House colleagues for their efforts to champion fire safety and support those who serve bravely,” said CFO Alex Sink. “This bill will strengthen all areas of fire safety, including arson investigation, resulting in better fire protection throughout our great state.”

HB 1041 will now proceed to the House and Jobs Entrepreneurship and Policy and Budget Councils before heading to the House Floor. The companion bill, SB 2388, is sponsored by State Senator Burt Saunders (R-Naples).


Fraudulent e-mails are being sent to consumers that claim to be from the FDIC in an attempt to obtain sensitive personal information, including bank account information. These e-mails falsely indicate that consumers can enroll in card insurance to protect against Internet fraud.

The Federal Deposit Insurance Corporation (FDIC) has received numerous notifications from consumers of an e-mail that gives the appearance of being sent from the FDIC. The "From" line of the e-mail displays the name "Federal Deposit Insurance Corporation " and the subject includes the words "Consumer Protection."

Current versions of the fraudulent e-mail state:

"Who is FDIC?

The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks.

What can FDIC do for you?

Despite the efforts of law enforcement, Identity theft is becoming more sophisticated and the number of new victims is growing. In general, consumers are protected against liability for unauthorized accounts or transactions under federal and state law and by financial industry practices. Identity Theft can affect consumers in many ways, thats [sic] why FDIC is presenting a new card insurance which can restore you up to $500 if you are a victim of internet fraud.

Learn more about Consumer Protection Card Insurance: Clicking here will redirect you to a online signup page for this program."

The e-mail requests that recipients click on a hyperlink that is provided. This directs the recipient to a "spoofed" Web page requesting the user to enter personal information to receive $500 of "card insurance." The requested information (name, phone number, Social Security number, address, card number, bank name, card expiration date, card verification code, and electronic signature/ATM PIN) could be used to perpetrate identity theft and gain unauthorized access to bank accounts. Be aware that the appearance of the fraudulent e-mails can be modified and that additional variations are possible.

Consumers should NOT access the link provided within the body of the e-mail and should NOT, under any circumstances, provide any personal financial information through this media.

The FDIC has shut down the fraudulent Web site and is investigating the source of the e-mails. Consumers are asked to report any similar attempts to obtain this information to the FDIC by sending information to

Information about counterfeit items, cyber-fraud incidents and other fraudulent activity may be forwarded to the FDIC's Cyber-Fraud and Financial Crimes Section, 550 17th Street, N.W., Room F-4004, Washington, D.C. 20429, or transmitted electronically to Questions related to federal deposit insurance or consumer issues should be submitted to the FDIC using an online form that can be accessed at

For your reference, FDIC Special Alerts may be accessed from To learn how to automatically receive FDIC Special Alerts through e-mail, please visit

Consumer Services Helpline 1-877-My-FL-CFO
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