Investigation uses hidden cameras -- and Aunt Alice

JS Manalapan, NJ — Fri, 11 Apr 2008 14:40:30 GMT

I just filed a complaint against an agent for the exact same thing. My husband and I were completely mislead by the agent reguarding our "MultiFunded Annuity policy. I filed the complaint on 04-07-08, before I knew about this story. Even though we are not "SENIORS" this agent has taken our life saving with misleading jargon that we never agreed to.

Investigation uses hidden cameras -- and Aunt Alice

Bonnie — Fri, 11 Apr 2008 14:47:50 GMT

Does anyone know how to get ahold of Chris Hansen? I have someone now trying to scam me they even sent me a check I have here but don't know what to do/ HELP!

Investigation uses hidden cameras -- and Aunt Alice

Fri, 11 Apr 2008 14:52:01 GMT

Not an advocate of indexed annuities but in general, annuties are very effective for some individuals. I certainly hope you give equal time to the benefits of such sales - after all, in our industry, we MUST, BY LAW give both sides of the story.

Investigation uses hidden cameras -- and Aunt Alice

Bryan Plonsky, Boca Raton, Florida — Fri, 11 Apr 2008 15:25:39 GMT

Dear Chris, I applaude you for your upcoming expose on insurance agents taking advantage of seniors. However, I own a company called the Senior Information Center in Boca Raton, Florida. We do not treat our clients in any way like you will be showing in your series. I know there are many agents that prey and take advantage of the seniors, but we are not one of those agents. So I would invite you to attend any of our seminars or to stop into my office to see how we conduct ourselves. There is always two sides to every story and I hope you will be showing that in your series.

Investigation uses hidden cameras -- and Aunt Alice

Plymouth, MA — Fri, 11 Apr 2008 15:25:45 GMT

I actually own an insurance company that deals with asset protection and in some cases the sale of Index annuities. (They are not called EIA anymore.) I am in total support of this type of show bringing to light the practices of some "agents" who do not have the best interests of their clients at heart. It is so important for our industry to have a good reputation and this is a good thing. However, in saying that, I hope that Dateline does this responsibly and presents the good as well as bad. ALL INVESTMENTS have their pros and cons, and we find fault with anyone who doesn't present ALL sides to each case. I trust Dateline will do a fair job, but with the reputation of the media, I have my dreads.

Investigation uses hidden cameras -- and Aunt Alice

L. R. Brown, Goldsboro, NC — Fri, 11 Apr 2008 15:36:34 GMT

It is no secret within the industry that "indexed annuities" were created so that individuals with only an insurance license would have something to sell that on the surface, at least, would compete with low cost actively managed annuities.

If you want to blame someone, blame the CEO's of certain insurance companies and more importantly the insurance commissioners of the various states who approved these things that often contain surrender penalties that last over a decade.

We often forget that the time honored pension is nothing more than an annuity so we know they work and work well for retirement instruments, but without doubt there are some individuals and companies who will create ones whose main emphasis is commissions and not value.

A good annuity is a good investment vehicle. A bad one is truly bad! Indexed annuities were designed as marketing tools rather than investment vehicles. A good low cost variable annuity has many, many benefits for the income dependent elderly. It's marketing however, is regulated by the SEC ultimately, and thus held to a different and higher standard of value.

Investigation uses hidden cameras -- and Aunt Alice

D Wisconsin — Fri, 11 Apr 2008 16:04:55 GMT

Chris, I would like to point out that Indexed Annuities usually do not pay "high commissions"
the highest paying commissions are usually Variable annuities, which quite often pay twice the commissions of Indexed Annuities. These annuities (variables)generally cannot be sold by insurance agents, yet they have the same downsides that you are portraying in your investigation, plus the risk of being invested directly in the stock market. Did you take a look at these? I am an insurance agent and frequently help people protect their assets from the volatility of the stock market through the use of both Indexed annuities and Fixed annuities. I hope that you show the good points of annuities: deferred growth,cannot lose principal, can avoid probate; to name a few. I agree with some of the posts above that there are some agents who do not use ethics to guide them, but there are many more that do.

Investigation uses hidden cameras -- and Aunt Alice

john doe, in PA — Fri, 11 Apr 2008 16:13:43 GMT

Wish they could do a segment on power companies in PA and how they give ~$30,000.00 to in equipment to contractors to audit Energy in people's homes...other contractors can't compete.....and the homes are not eligible for the program.....no screening..."just spend the money...the PUC is watching" Public Utility Commission..not many contractors used to do this stuff...now more are getting into it...so a little news is being generated about this scandal

Investigation uses hidden cameras -- and Aunt Alice

Beth Messner, Milwaukee, WI — Fri, 11 Apr 2008 16:24:08 GMT

I am an insurance agent in Wisconsin. It seems that it is getting harder & harder for agents to sell annuities. The bad press about them is rampant. A lot of seniors label them as "bad", yet in the majority of cases when I ask them to explain why, they don't know! They just remember bits & pieces--mostly INACCURATE about an article they read, or a story on the news they heard, or what a friend said, etc. I do agree that there are some unscrupulous agents who don't fully explain (and in SOME cases) don't honestly explain the details of the annuity, but I am afraid that all too often reports like this on Dateline NBC add unnecessary fuel to the fire. Unfortunately "scare tactics" are used by some agents, but I also see Dateline's report as a "scare tactic"! There are a lot a ethical agents out there! Please don't give the industry a black eye because of the sales "practices" of A FEW!! To echo the comments above, there is good and bad in EVERY investment option out there & in every person "selling" those investments! -B

Investigation uses hidden cameras -- and Aunt Alice

Utah — Fri, 11 Apr 2008 16:39:01 GMT

It's interesting to me that so much media attention is given to insurance products, particularly annuities, and very little is given to the harm that is done through the use of securities. In my 10 years in the financial services business, I have yet to see any senior damaged financially by a fixed annuity or EIA as severely as by mutual funds that tank or other securities that have a lot more risk. That being said, I know the tactics can be brutal and that no investment is right for every person. I am a bit tired of the media reporting that their money is "Locked up". It may have a surrender charge for a certain number of years, but that does not mean they have zero access to their funds. In fact, I have used fixed annuities with a 10 year surrender to give a client immediate monthly income. In many cases, if the product fits the retiree, the longer contract may give them a better guarantee, more income, higher interest, etc. I hope that dateline is responsible as well, but I doubt it as their job is to create veiwership, even if that means they only tell a portion of the story.

Investigation uses hidden cameras -- and Aunt Alice

B. Mayer — Fri, 11 Apr 2008 17:40:26 GMT

We have been misled about this in the exact same was as being described in your article. You are a few years too late. We have just been charged thousands of dollars for an "early withdrawal" from three different sources even though our contract says there will be no such charge because of my husbands age. The reason they state is that the account is a "house account" and not a direct purchase. Would love to know more about a house account. In one account they took a huge bundle and tell us it was in the annuity contract and prospectus both of which we have no record of. Questioned the broker and he doesn't have a copy of it either. Isn't that against legal behavior? Wish you had done this story 10 years ago. This "agent" has cost us a lot of money!

Investigation uses hidden cameras -- and Aunt Alice

Yaakov Simons, Los Angeles, California — Fri, 11 Apr 2008 18:25:08 GMT

Dear Chris, I have been a resident licensed agent for 16 years plus in CA. My prior career was as a senior analyst for Lockheed Aerospace before the nationwide major aerospace recession. I have been specializing in both traditional and fixed indexed annuities (FIAs) in both the Tax Sheltered Annuity market as well as the senior market. FIAs can be a valuable retirement safe harbor. There should always be full disclosure to the client regarding surrender periods, surrender charges, liquidity options etc. A person with ethical integrity should fully disclose clearly the pluses and minuses of their product. It is an ethical issue as well that the media be cautious not to wield their influence to bias the public in purchasing something that could be very benefical to them.

Investigation uses hidden cameras -- and Aunt Alice

Roger, Dallas Texas — Fri, 11 Apr 2008 18:40:13 GMT

Wow, already from the preview video clip I see unscrupulous media behavior by tossing out bombshells that I KNOW are untrue. The man in the video, if it is true that he invested in an Indexed annuity, did not lose his life savings. As a matter of fact, in the worst case seniero, if he were to cancel his contract, would have a penalty or withdrawal fee. I am still hopeful that NBC will do the right thing, but if prior experience is the judge, then watch out folks, another reckless media created hype fest, done to get ratings and scare the public into an unwarranted state of fear.
By the way, nice timing. At the same time your network, as well as others, talks of the looming recession, you will "expose" the only products that offer, safety from market loss, for your ratings, but in the meantime, due to your reckless behavior, scare American seniors again from maybe the only way to preserve their assets.
Seniors are tired of being "prayed" upon by the media in making them feel like they should be afraid of every little thing in their world.
Again, I hope I am wrong, but so far, not so good. We will see on Sunday.

Investigation uses hidden cameras -- and Aunt Alice

Roger Gainer, Mill Valley, California — Fri, 11 Apr 2008 20:31:29 GMT

I appreciate your work in exposing unfair sales practices in many areas; annuities, autos, repairs etc. I wish you would spend more time on the other side of these stories; showing people how to find reputable sales people and evaluate these services so they can make good decisions on their own behalf. People need to buy cars, get repairs, do their taxes and understand annuities. These contracts can be very helpful if properly understood. It is important to understand the costs, guarantees, liquidity and other features. Some annuities have holding periods of as little as one year. I own them in my own IRA and have been very happy with the performance and peace of mind I get from knowing I won't lose money and the above average returns I have experienced. I got tired of watching my mutual funds go up and down. Please help you audience become good purchasers, not just afraid. Thanks

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Anthony, Woodbury, Minnesota — Fri, 11 Apr 2008 20:53:14 GMT

I am an investment professional who, when the situation is right, has suggested indexed annuities to clients. As a professional who puts the welfare of my clients ahead of any commissions, I hope that you also dedicate a significant amount of time to fairly portray that for some individuals an indexed annuity may be the best investment vehicle for them.

Investigation uses hidden cameras -- and Aunt Alice

Lisa Ingram Carthage, TN — Fri, 11 Apr 2008 21:01:55 GMT

I am a financial advisor with a well known and respected company with offices in the USA,UK, and Canada. The type of sales practice and annuity (Equity Indexed Annuity)Dateline is investigating is in my opinion not in the best interest of anyone. I hope Dateline will explain that these types of annuities are NOT offered by most large investment firms or larger insurance companies for the simple reason that hardly anyone can understand them and they are not at all in the best interest of the client. There are, however, many appropriate annuities on the market today offered by respected brokerage firms that are appropriate for the retired person. Thank you.

Investigation uses hidden cameras -- and Aunt Alice

Travis A Morrow, Kennewick WA — Fri, 11 Apr 2008 21:19:55 GMT

My family and I are Dateline junkies. However, I learned a couple weeks ago that they would be running this "scam". I own an insurance AND registerd investment (securities) business and thought "this will be very interesting". As the other blogger indicates, I ASSUME, Dateline will show the side of what a LICENSED planner shows his clients. While I am one who LIKES index annuities, it's true that they are not for EVERY person or situation. And, my firm ALWAYS has to go through surrender periods and the pro's and con's of each type of account.

Dateline!! I would LOVE to show you the ETHICAL side of presenting annuties!!!

Investigation uses hidden cameras -- and Aunt Alice

JR, Cave Creek AZ — Fri, 11 Apr 2008 22:30:13 GMT

FIA's, not EIA's are not investments. They are savings vehicles designed to offer protection of principle, tax deferral, and above average chance for gain when compared to traditional fixed annuities and CD's. I truly hope this is not another case of fearmongering by a network as not all annuities are bad and not all salesmen are disreputable. When used correctly FIA's offer client advantages that no other financial tool does and are pivotal in providing lifetime income. To truly get both sides of this story, consult NAFA ,the National Association of Fixed Annuities.

Investigation uses hidden cameras -- and Aunt Alice

A, Omaha, NE — Fri, 11 Apr 2008 23:44:06 GMT

This reminds me of a local federal case her in Nebraska. Bryan Behrans is said to have scammed 6.5 billion out of mostly seniors.

Here is the SEC link.http://www.sec.gov/litigation/litreleases/2008/lr20427.htm It has been disappointing that there had been very little press coverage on the case.

Investigation uses hidden cameras -- and Aunt Alice

Vickie Nate, Parker, Co. — Sat, 12 Apr 2008 00:37:20 GMT

I just entered into one of these annuities. My agent disclosed all of the surrender penalties and made it clear how long my money would be held up. I also read the entire brochure before my appointment and felt nothing was withheld from me. I am comfortable with my decision. Make sure you include all sides to this story because these can be good things.

Investigation uses hidden cameras -- and Aunt Alice

Yaakov Simons, Los Angeles, California — Sat, 12 Apr 2008 01:04:52 GMT

Dear Chris, I have been a resident life agent for over 16 years in CA + I have non-resident insurance licenses in NY, NJ, & AZ. My prior career was as a senior analyst for Lockheed Aerospace before the nationwide major aerospace recession. I have been specializing in both traditional and fixed indexed annuities (FIAs) in both the Tax Sheltered Annuity market as well as the senior market. FIAs can be a valuable retirement safe harbor. There should always be full disclosure to the client regarding surrender periods, surrender charges, liquidity options etc. A person with ethical integrity should fully disclose clearly the pluses and minuses of their recommended products only after determining if it is suitable for the client. Almost all companies have Annuity Suitable Forms that must be completely to confirm that an annuity purchase suits the client's current financial situation and long term goals. It is an ethical issue as well that the media be cautious not to wield their influence to bias the public in purchasing something that could be very benefical to them. Most Sincerely, Yaakov Simons Los Angeles California

Investigation uses hidden cameras -- and Aunt Alice

Mark W, Seattle, Wash. — Sat, 12 Apr 2008 01:10:25 GMT

When someone sells a mutual fund or a stock do they get a comission? Or when you buy a car or a house do those people get a comission?

Investigation uses hidden cameras -- and Aunt Alice

Norman Johnson, Newport Beach, CA — Sat, 12 Apr 2008 01:42:38 GMT

The unfortunate fact is that EVERY industry has its abusers. I strongly applaud your efforts and that of regulators to help weed out the our bad apples. The issue is Suitability and Disclosure. However, there are some Fixed Deferred Annuities that are indeed highly suitable for some Seniors; providing full disclosure of potential benefits and limitations are disclosed, reviewed, and signed off on. The right products for the right clients offer tax-deferral, opportunity for above average return, reasonable liquidity and, above all, SAFETY. Ask anyone in the so-called Securities Market today how safe he feels. You won’t have to ask my clients. ….but some of them may wonder after seeing your show! The potential to paint a whole industry with the same dirty brush is troublesome. I’m expecting a lot of phone calls.

Investigation uses hidden cameras -- and Aunt Alice

David T Wilson , Litchfield, CT — Sat, 12 Apr 2008 02:26:53 GMT

Good for Chris Hansen and DateLine! I am an insurance agent and hate having to live with the stigma that unethical agents create.Maybe they will begin to think twice now that DateLine is doing it's thing.Maybe they will be in your town next?

Investigation uses hidden cameras -- and Aunt Alice

Sheryl J. Moore — Sat, 12 Apr 2008 02:29:24 GMT

My name is Sheryl J. Moore, and I am an independent market research analyst that owns a consulting firm which tracks every product and company in the indexed annuity market, as well as the sales of the products. I, along with everyone else in the indexed annuity industry, have long awaited this segment. However, I am disappointed after seeing the teaser which shows Chris Hanson interviewing Minnesota Attorney General Lori Swanson. Indexed annuities are good products that provide downside guarantees and the potential for greater upside potential than many other safe money instruments (such as traditional fixed annuities and CDs). However, they are not a one-product-fits-all solution. In addition, there is no excuse for bad agent behavior. Insurance companies in this industry do not put up with it. Market conduct and suitability (particularly senior suitability) has been a primary focus in our industry since Fall of 2005, and tremendous strides have been made. I won't go down the laundry list of accomplishments, but I will refer you to IMSA for more information (www.imsaethics.org). As a consumer, I rely on the news for unbiased information that provides BOTH sides of the story. I was disappointed that both Chris and Lori make indexed annuities sound complex. The excerpt where Lori reads the description of a market value adjustment (MVA) is standard language for ALL annuities (fixed, indexed, and variable) which bear this feature. That one segment may have sounded complex while taken out of context to a [lawyer] or [news correspondent], but is explained at length in language that is approved by the insurance division in the contract that is presented to the client in the annuity contract. Understandably, Lori has a political agenda. However, I would have thought Chris would have followed-up on items such as this with an industry expert, not just a politician with an agenda. This segment looks like it is going to be another sensationalist story with hidden camera evidence of some bad apples to support Lori Swanson's argument. Hopefully, Chris Hanson has the integrity to tell viewers that since his taping, Minnesota's legislative auditor has launched a preliminary investigation into allegations of ethical and legal lapses in Attorney General Lori Swanson's office (of interest, Swanson and some of her top aides have been accused of trying to find defendants to fit lawsuits on high-profile topics.) Yes, at times indexed annuities are the instrument that are used in the course of bad agent behavior. However, I would hope that by now Chris Hanson, along with all of our viewers, would realize that this is the case with ANY financial product. A special message to Lori- more than 42% of all sales in the fourth quarter of 2007 went into products with a ten years surrender charge ("a lengthy, lengthy period"? How do you define that, Lori?) . And, FYI Chris, indexed annuities are not investment products. I look forward to the broadcast, and view it as an opportunity for us all to improve our practices.

Investigation uses hidden cameras -- and Aunt Alice

Holland, MI — Sat, 12 Apr 2008 02:30:35 GMT

Just as there are bad, and good, car salesman, there are bad and good insurance salesman. I am certainly in favor of shedding light on the practices of unethical and/or illegal practices by SOME agents. However, I do hope that Mr. Hansen is not trying to increase his own ratings and thus line his own pockets at the expense of the many good agents who have families to provide for and who take pride in the fact that they do what is in their clients BEST INTEREST. Being one of those agents, I can honestly say that I greatly enjoy the fact that I help a lot of people. So, Mr. Hansen, I hope you don't throw the baby out with the bath water.

Investigation uses hidden cameras -- and Aunt Alice

J L Spence — Sat, 12 Apr 2008 02:58:31 GMT

Chris, I am a licensed insurance agent and a registered representative with a broker dealer. The key to selecting the right investment is called "suitability." This involves elements such as "risk tolerance" and "time horizon" along with he client's personal circumstances. If the client has to be "sold" on an investment, it may not be the right one. The best way for consumers to make sure they are dealing with a reputable agent is to check with the appropriate state insurance department for complaines. If the agent is a registered secutities representative (most reputable ones will), the comsumer can easily run a report called "Broker Check" at www.finra.org. FINRA is the new name for the NASD. This report gives a decent amount of detail about the representatine. Although there are plenty of scams, please make your viewers aware that we are looking at the exception - not the rule. Most of us who work with retirement planning are reputable and do a good job for our clients, earning every penny of that "big commission." My concern with your story is that it may scare some seniors away from any investment, allowing inflation to destroy their purchasing power. Anyway, a starting point for the consumer is education: About investment opportunities... but mostly about your investment professional. Thanks, J L Spence

Investigation uses hidden cameras -- and Aunt Alice

T, California — Sat, 12 Apr 2008 04:03:33 GMT

I can't wait to see this show!! I am a financial advisor in California and I've been complaining about the abuses in annuity sales for the past couple of years (with little effect)...

I've all but given up trying to change my industry and, instead, have decided to educate as many retirees as I can about the positives and negatives of annuities so that they, in the end, can make the best possible decision. I also advise retirees to ask for annuities with no surrender-charges if they end up being convinced that the annuity is the best thing for them... That way, they can walk away if they need to without penalty.

To be fair, are annuities bad products? Of course not. They have a place (just as stocks, bonds, CDs, etc have a place). The problem, as I see it, is that the high commissions paid on annuity sales have caused too many people to sell them in less than suitable situations.

Are the agents doing it just to make a commission? Who knows... But, in the end, does it matter what the agent's motivation was if the client (especially a senior citizen) ends up with something that truly doesn't work for them???

I have a suggestion (and I look forward to reading commentary on this)... Let's pass a national law that says that if you sell an annuity to someone over age 65, that annuity CAN NOT have a surrender charge. If the insurance company wants to offer a high commission on a product that is sold to someone over age 65, they can certainly do that. However, if the senior's life situation changes, the insurance company should have to "claw back" the commission from the rep (instead of hitting the client with a big surrender charge).

I'll be recording this show and playing it to everyone I can!

Investigation uses hidden cameras -- and Aunt Alice

Liz Siegrist - San Diego, CA — Sat, 12 Apr 2008 04:14:18 GMT

PLEASE, PLEASE, PLEASE!!! Equity Indexed Annuities ARE NOT the problem. They offer a phenomenal strategy in protecting principal of investment for seniors. IT IS ONLY THE UNETHICAL (or uneducated) SALESPEOPLE WHO ARE THE PROBLEM!! There are many ethical financial professionals doing free meal seminars. WHY CAN'T the media focus on the TRUTH in where the problems lie, TEACH the public the simple ways to protect themselves, and stop the overall assault on the ENTIRE financial professional industry, specific marketing strategies and EIAs in particular??

Investigation uses hidden cameras -- and Aunt Alice

Orlando Miami FL — Sat, 12 Apr 2008 07:54:03 GMT

Why would a senior buy an INDEX ANUITY??It doesn't make any sense

Investigation uses hidden cameras -- and Aunt Alice

Betty Lopes. Danbury, Ct — Sat, 12 Apr 2008 09:00:21 GMT

I also had an issue with my insurance co. this past week. My husband and I are both retired. The rep. wanted us to invest our CDs and IRA into their annunities and also, not telling us that if we needed our money back how to get it, or if any penalties may occur. I chose not to invest. At that point the rep., without my knowledge, when to my daughter's place of employment, had her pulled from her work area, asked to speak in private and that it was about her parents. The first thing she thought of was that my husband and I had died. He went on and told her,that her parents were not making a rational decision. Is that an invasion of privacy or WHAT. I called his supervisor and make a formal complaint of his tactics.

Investigation uses hidden cameras -- and Aunt Alice

Tom Chrisman, Santa Fe, NM — Sat, 12 Apr 2008 11:46:55 GMT

I too sell Fixed Indexed annuities and feel I do in a very open, total revealing manner. I am concerned about the program's total forthrightness after viewing the clips and info available. Comments by the seniors that "they took all my money" seems to indicate when the transaction was completed they had no money or value. They may have had values with unintended surrender costs/periods but to insinuate they may have lost all their funds is not appropriate if it's not the case.
Bottom line, if the program doesn't fairly present all sides of the subject, the program will be just as bad or even worse than agents for not fully revealing all aspects of a transaction.
Tom Chrisman Santa Fe, NM

Investigation uses hidden cameras -- and Aunt Alice

David Boyden — Sat, 12 Apr 2008 14:51:24 GMT

My 73 year old mom and I sat through a "asset Protection for Seniors" "free diiner" at an upscale steakhouse. The presentation (scripted by an insurance carrier specializing in Equity indexed Annuities (EIA)) was designed to create doubt in banks, securities and raise the flag on the EIA.
We sat through a presentation at my mom's home where the answer was an EIA that would create a "legacy" for beneficiaries nad $17,000 in commission for the agent.
Check ou the work Senator Herb Kohl has done in protecting seniors.

Investigation uses hidden cameras -- and Aunt Alice

Jack, Victoria, Texas — Sat, 12 Apr 2008 18:35:27 GMT

I am an insurance agent in Texas and work primiarly with Seniors across the whole state. I sell all insurance products, including annuities. When selling an annuity I alway explain the ins and outs of the product, the 10% penalty free withdrawal feature annually, the surrender charges, read the disclosures and brochures to all potential clients. I fully disclose everything about the product, I hope that your program addresses agent like myself that do not mislead seniors. As an ethical agent I applaude you for airing this segment, but I also hope you have done investigative hidden cameras on agents that fulling disclose to seniors to show the good side. Agents like myself that do the right thing.

Investigation uses hidden cameras -- and Aunt Alice

A from Tyler, TX — Sat, 12 Apr 2008 20:16:40 GMT

I have worked in the insurance and investment industry for many years. My company does not sell Equity Index Annuities, however, we do sell other types of annuities. Over the years annuities have gotten a bad rap, some of it merited. However, in recent years, new benefits have been introduced to variable annuities that have made this product very good for the investing public. Most of the large giants who participate in sales of these types of products have check and balance systems in place for their agents regarding suitability and do a great job of making sure that the appropriate product is sold to the appropriate client. While I am not a fan of equity index annuities, there needs to be a distinguishment between these products and other types of annuities. Unfortunately, most people will only remember the word, annuity, not the type of contract it was. I suggest you do a segment on the good things that some types of annuities do for people who are retiring or are already retired. In a world where one bad apple can spoil the whole bunch, those of us who operate in an honest and ethical environment need a reprieve from one-sided reports.

Investigation uses hidden cameras -- and Aunt Alice

H Price Cape Coral, Fl — Sat, 12 Apr 2008 20:36:24 GMT

I am so glad this subject has finally surface. My Mother was a victim of this crime.It has taken a toll on my family. My mom is 77 years old, a widow and just sold the family's ranch. Plus everything she own. The vulture were circling and I had no controll of this matter until it was to late.It has taken months to find a good lawyer and plus to convince my mother that this guy was misleding her. This Financial Advisor had her so convince that she was doing the right thing,in the name of jesus christ.It pulled her heart stringes.We are making progress in returning our finaces.Thank you for telling this story and helping the elderly.

Investigation uses hidden cameras -- and Aunt Alice

Boe,Bronx, New York — Sat, 12 Apr 2008 22:30:39 GMT

Dear Chris;

I am contacting Dateline today to report a fraud, scam, and theft of property
committed by a collegue whom I met in college in
New York.

The story begins like this, I was interested in
manufacturing urban Men's clothing in
Asia, so I contacted hhim via email on
facebook.com and spoke to him on the phone in
Singapore. Then he arranged a factory for me Thailand
and promised me it will take 6 weeks from June 4 2007.

1. After contacting him, he promised me he
can find a factory in Thailand and even offered to and
to manufactures of the clothing for me.

2. After talking to Dilip, I mailed him 4 samples
clothing via express through the United
States Postal Services in June 2006.

3. After sending him with the package, I then send
him $5000 for the production of the Men's jeans at
Mail the samples to his address in Singapore.

4. It has being several months since I sent him my
sample and the money for the production of the
clothing but he have not deliver any goods to me as
of today and have ignored me.

5. When I first spoke to him, he told me he is
currently waiting to enlist in the Singaporean
military and introduce me to his friend to assist me
with the production of the clothing in his absence,
but I have not receive anything yet.

6. My problem is this, how do I recover my goods or
money from him when refuses to communicate with me
but always communicating with some our college
associates on myspace.com and facebook.com

I will like to know what are the necessary steps
involved to file a criminal fraud and corrupt charges
against him.

I have his information and it is available upon request.

Thank your for immediate reponse.

Boe

Investigation uses hidden cameras -- and Aunt Alice

TS Omaha, NE — Sat, 12 Apr 2008 22:40:59 GMT

I also really hope you show both sides of the story. There are some very bad Indexed Annuities out there, but there are also some very good ones. Just like there are good and bad agents. It is never advisable to lock all your money up into an annuity, but it can be a great tool for a portion of your money because it's tax deferred, it avoids probate, and many of them are guaranteed never to lose money.

Investigation uses hidden cameras -- and Aunt Alice

EK, Phoenix, Arizona — Sun, 13 Apr 2008 01:13:46 GMT

Mr. Hansen,

How about doing an expose on the sales practices of stock brokers who always seem to emphasize the potential high returns a stock or mutual fund has as outweighing the potential risk of loss. I have personally seen hundreds of thousands of dollars lost from brokerage accounts under the guise that, "it was the market." Yet, these brokers are supposed to have fiduciary responsibility for their clients. Or, how about the surrender charges, contract lengths AND risk of loss that Variable annuities have. I think you are missing the boat as to where seniors face the most potentially financially devastating risk, licensed securities dealers. They, by in large sell products and vehicles in which the owner can lose nearly all, or all, of their life savings. I have seen it happen. In the interest of responsible "reporting", choose to do a story on several areas inside the financial services industry. There is plenty of greed, graft and fraudulent behavior to find in ALL areas of financial services.

Investigation uses hidden cameras -- and Aunt Alice

Yaakov Simons, Los Angeles, California — Sun, 13 Apr 2008 04:28:59 GMT

Investigation uses hidden cameras -- and Aunt Alice

Leslie P. Rockford, IL — Sun, 13 Apr 2008 04:45:27 GMT

It's about time Index Annuities and sales tactics get exposed. I've been in the investment business for 25 years. The sale of these products are ALL about the sales commission. DO NOT believe these commission-driven insurance agents when they say there is another side to the story. It's ALL about their commission...not the clients! It's like the vampires guarding the blood-bank. Seniors and would-be buyers...beware!

Investigation uses hidden cameras -- and Aunt Alice

Jean Hash — Sun, 13 Apr 2008 09:36:17 GMT

If you really want to see some seniors rippd off by insurance agents selling annunities through dinner seminars go to Spring Hill, FL and The Villages, FL. Agents keep transferring the senior's retirement funds from annuities to annuities just for the commission and cost the seniors a lot of money for surrender charges. It is sad that an agent talks the senior into letting him/her transfer their retiement funds that are already in annuities to new annuities that gives the senior a little bonus and the agent a big commission, expensive paid vacations, rolex watches and many other expensive gilfs.

Investigation uses hidden cameras -- and Aunt Alice

Chris, Boston, MA — Sun, 13 Apr 2008 12:49:42 GMT

Looking forward to your piece. Just remember, these products may be restrictive and there is NO excuse for bad sales practices, but this story pales in comparsion to the amount of money lost for investors by "sophisticated, highly educated, Wall Street hedge fund and money managers. They never seem to be held accountable for their "deceptive" sales practices.

Investigation uses hidden cameras -- and Aunt Alice

Bert Livingston — Sun, 13 Apr 2008 13:27:52 GMT

If you think these agents are "bad apples" you need to check out agents and "planners" at Banks...they sell everone they meet an annuity!

Also, as an agent with 30 years of experience I can assure you that the Index annuity products meet the needs of specific seniors under specific circumstanmces...better than other investment and savings vehicles, the problem is with the agents, not the product. Please do not smear products that actually help people by linking bad salesmen and wommen to them.

Investigation uses hidden cameras -- and Aunt Alice

V. Rosen CA — Sun, 13 Apr 2008 14:23:34 GMT

I have a question for you...are these all scam artist or did you do your homework and actually talk to some responsible agents who do what is right by the client? You know that when you do things like this you hurt the good as well...There are some that will constantly do what is right by the client. Did you talk to them? Please come interview us, come talk to our clients. Be fair. There are good honest agents all over this country you are hurting. Do what is right be fair and honest! Hey why aren't you attacking the stock brokers that are losing these clients money? They are losing seniors thousands upon thousands of dollars and charging them for it! Have you done on expose on them?
Probably not...

Investigation uses hidden cameras -- and Aunt Alice

Brandie Hunter, Zephyrhills, Florida — Sun, 13 Apr 2008 15:07:00 GMT

I am an insurance agent in Florida who does sell fixed indexed anuities. I comend Dateline for exposing those of us who, shall we say, give the rest of us a bad name. I have told several of my clients and prospective clients to watch your investigation this evening to compare the differances between a really bad agent and a good one. In many cases fixed indexed annutities are wondferful for the senior and pre-retirment markets. They offer market risk protection, in many cases, a base guaranteed rate of return, living benefits such as assistance paying for nursing home care, Tax Deferred growth (often resulting in a reduction of tax on Social security benefits), and dealth benefits to the heirs. In addition, in many states, annuities( including variable, fixed traditional, and fixed indexed) are considered life insurance policies and as such the cash value in or any payments comming from them are totaly creditor proof. In closing, I would like to say to all of the viewers and producers, in a bunch of grapes you are likely to find several bad ones. It dosen't mean that the whole bunch is bad and shouldn't be used to make that perfect bottle of wine. This concept I sincerely hope that Datline will convey.

Investigation uses hidden cameras -- and Aunt Alice

Brian Erkfitz Waco, Texas — Sun, 13 Apr 2008 16:08:43 GMT

Dear Chris,

Having not seen the entire show at this time, I am not suprised you were able to find some of the very worst of the people in the Insurance industry. They do not deserve to be allowed to continue. We as an industry take very seriously the actions that hurt our clients. Remember we too, Insurance Brokers, have Parents, and Aunts and Uncles, and we would not want them mistreated.

I would like to point out that the majority of the Insurance Agents I know that have been in the business over 5 years, are honest, caring and ethical people. And we add value to people's lives and make a differenct to our clients everyday. I hope you will allow some Good Agents to have time to respond.

The industry and the public do not need or WANT agents that do not do the RIGHT thing for their clients.

In my business, I use the example if I would not sell this product to my own Mom and Dad, I will not offer it to a client.

Investigation uses hidden cameras -- and Aunt Alice

Berwyn, PA — Sun, 13 Apr 2008 16:25:30 GMT

I am a Registered Investment Advisor representative and we sometimes recommend Fixed Indexed Annuities for a PORTION of a client's portfolio. We also recommend a protion to be managed by a professional money manager. I would not jepoardize my license as an investment professional in order to make a sale.

Please make you give credit to professionals in the industry who abide by the rules and give the appropriate advice.

From what I've seen it looks like you are portraying anyone selling Fixed Indexed Annuities as a predator. All financial strategies have a reason and that is to accomodate the client so that they can fulfill their goals that is if the plan is done by a professional.

Please give both sides of the story in your report because you could damage a valid tool in the the toolbox of valid Investment Advisers.

Investigation uses hidden cameras -- and Aunt Alice

Jeff Leonard, Melbourne FL — Sun, 13 Apr 2008 16:32:11 GMT

Chris,
I am an insurance sales person and specialize in the Senior community. My practice is devoted on doing what is right for the individual and not what is best for me personally as a salesperson. I also do provide seminars, however, during my seminars I always warn of some of the false and misleading sales tactics provided at the seminar. Some of these are as follows:
1. Here is the book I wrote...total BS.
2. Here is a magazine article written about my...again total BS.
3. Misleading credentials
Also, during my seminars, I stress the difference between Fixed Annuities (FIA's too) v. Variable Annuities. You should know that Variable Annuities are sold by Stock Brokers and not Insurance Agents and for the most part are much worse than Fixed Indexed Annuities. In fact, the average Variable Annuity has an annual cost of 2.2-3.2%. Many VA's are sold with the understanding that you can never lose your money aka principal protection. Again, this is total BS. Case in point. I met with an individual retired male 1 month ago and reviewed his annuities. He had 3 VA's. In all cases the brokerage company and insurance company made more money than the insured. This was due to the high annual cost of 3.2%. What was most unfortunate about this case is that the money was the man's IRA. Facts: Since 1999, the policy inception date, this man's initial investment of $122K had shrunk to $72K. The investment since inception earned a whopping $895.00-yes, that is right 895.00. This investment should have earned a minimum of 5% annually. After calling the broker and insurance company we discovered that Allstate earnied approx. $32,000 in fees during the 9 year period. Bottom line is that I find more Senior abuse by Stock Brokers selling VA's than I do insurance agents selling FIA's. The challenge with annuities in general is all the options they can come with are used to sell/mislead seniors into thinking their money is growing at rates (7-8%) that are not realistic given today's interest rates. I would ask you to recognize that there are good and bad annuities, stocks, mutual funds and investments of all kinds. At the end of the day it always comes down how the products real benefits provide real value. I will tell you that there are many annuities that are very good for seniors. Having said all this, I will acknowledge that I have personally witnessed some horrific people using scandalous sales tactics to make a sale, whether the product is right or not for the client. In most of these cases you have an insurance sales person or a stock broker using intimidation tactics to belittle the senior. As I said in the beginning, I am an insurance agent and am very proud of the work my practice does, because we truly help our clients. Often is the case that I am fixing another bad agent/brokers plan.

Good luck with your show. I hope it also shows the good that has been done for many seniors who have worked with good agents.

Sincerely,
Jeff Leonard

Investigation uses hidden cameras -- and Aunt Alice

B. Baxter, Victim, St. Mary's County, Maryland — Sun, 13 Apr 2008 17:13:14 GMT

Chris - Cannot wait to see your piece tonight about insurance agent scams. Please do some research with the Maryland SEC and a certain financial planner out of the Baltimore area. He had a captive audience with us (State could ban broker from selling securities - Baltimore ...The Maryland Securities Commissioner alleges that Joseph Karsner IV steered clients into improper investments, and some lost so much money they had to come ...
baltimore.bizjournals.com/baltimore/stories/2007/04/09/story8.html?jst=pn_pn_lk - 107k - Cached - Similar pages

Some of us have lost our homes, have had to go back to work after actually retiring, are broke. He, on the other hand, has had many many records expunged. This type of thing must be STOPPED!!

Investigation uses hidden cameras -- and Aunt Alice

Paul — Sun, 13 Apr 2008 17:56:14 GMT

WOW I cant wait .The hype over these things far outwieghs the amount of sales.The equity index products account for about 7% of all annuity sales .I hope you present the morningstar ibbotson study showing most retirees should have 1/2 of their savings in annuities . I run an investment advisory and there are very few reasons to put 100% of anyone's money-in anything, especially the stock market.

Investigation uses hidden cameras -- and Aunt Alice

frank — Sun, 13 Apr 2008 17:59:50 GMT

Chris -great blog .I agree with the market as it is
I also want a safe place for my money. my annuities at least guarantee I get 100% of my money back.Thats better than my GE stock that just went down 20% ! But I can see that there are good and bad annuities -just like good and bad stocks

Investigation uses hidden cameras -- and Aunt Alice

Rob Northeast Wisconsin — Sun, 13 Apr 2008 18:56:16 GMT

Hi Chris,
I am a Registered Investment Advisor in Wisconsin I believe that if the insurance companies want to use the "Index" then the product should be regulated by the SEC. This is my feeling and the feeling of at least four Broker Dealers that I know of,they will not allow their Registered reps to sell Index Annuities and feel that there will be tighter regulaion imposed on them. I just ran into a client that had an agent sell her on an index annuity, she didn't even know what the product was that she bought and had no clue how it worked or the lengthy surrender charges associated with the product. The agent brought his manager with him to tag team her, pressure selling. SHAME ON THEM!!!!

Investigation uses hidden cameras -- and Aunt Alice

Charles Frost, Waldport, Oregon — Sun, 13 Apr 2008 20:29:22 GMT

One or two bad apples can taint the whole barrel! But wise folk will simply sort out the truth... The truth is, that the media usually slants the so called "real truth" through selective editing. I offer retirement and tax planning to seniors and boomers preparing to retire. Never had a complaint- None! The Fixed Indexed Annuities offer the safest product for retirement funds! Yes- expose the wily rascals, but don't distort or omit the truth about good people that employ honest sales tools for great products.

Investigation uses hidden cameras -- and Aunt Alice

Michael, Las Vegas, NV — Sun, 13 Apr 2008 22:27:51 GMT

I am concerned that Dateline will only present what the headline indicates and not the advantages of some of these savings programs that have proven to be a valuable safe money alternative to many seniors. If sold responsibly, these annuities can provide seniors with peace of mind and security. I only hope this will be conveyed in some way at a later date.

Investigation uses hidden cameras -- and Aunt Alice

D. C. Overland Park, Kansas — Sun, 13 Apr 2008 22:34:28 GMT

I,too, work in the retirement field. I applaud NBC for uncovering the unethical sales practices of insurance salesmen. I know the industry will suffer unfairly as a result of your program. I haven't seen it yet, but, would not telling both sides of the story be somewhat related to what your trying to expose? Oh, I forgot, you are selling something also. Maybe you should take your own advice. There are great annuity sales people all around the country. Getting a professional view from them wouldn't sell quite so much, would it?

Investigation uses hidden cameras -- and Aunt Alice

Bob, Washington — Sun, 13 Apr 2008 22:43:57 GMT

All industries have good and bad people - construction, medical, media, financial, engineering (I think you get the point) - so, why pick on one? Consumers must understand what they are purchasing from whom they are purchasing. There is so much information in the world that no one should ever get scammed - except for the ignorant.

Investigation uses hidden cameras -- and Aunt Alice

Josh Sinnott, Santa Rosa, CA — Sun, 13 Apr 2008 23:08:41 GMT

Hi Chris,

I am an insurace agent in CA that began in the business over 10 years ago working for a couple national wholesaling organizations before creating one and have been waiting for this series to air almost a year when I first heard about a couple agents getting 'caught'. I have worked with thousands of insurance agents in over 40 states and now work with the public and focus my business working with and for seniors and retirees in my area. Unlike the agents on your show, my loyalties are completely for the benefit of the client and I search to find the best situation for each person I meet, even if it's not with me. It doesn't take long in this business to make a decision to work for one of two things; either the benefit of your clients or for personal gain. Sadly, most agents choose the later.

I applaud you for doing this series. There is a huge problem in this industry at the level you have targeted, the personal producer. However, there is a much larger issue happening here. Not only are insurance companies creating non-client friendly products and rewarding commission greedy agents for the sale of those products, but serious problems also lie with each state's Department of Inusrance (DOI). If the DOI in each state would actually stand up, be firm and protect the clients in their state, I believe over 60% of the products would be pulled off the shelf, or removed from distribution and sale. How is it that two of the most client friendly products in the industry took almost one year to be approved in Massachussettes, but the MA Department of Insurance allows almost every Alliance, American Equity and American Investors product that is created avaliable for sale? These are some of the companies that have historically been notorious for creating some of the most non-client friendly products in the industry.

Then again, maybe the DOI will state that the products are too complex and complicated to understand. What is their main responsibility then? Maybe most of the blame remains with the insurance companies because they obviously understand the complexity and profit margin, yet still create these products?

Throughout this series, I hope you point out that there are two key steps in the process you are exposing and that there are actually good products and good producers. The first step is how the agent treats and educates the client, which I believe is the main point of the show. Second, the quality of the actual product being sold. Both steps must be appropriate and ethical for each specific client's situation in order for there to be a good sale. Unfortuately, most agents rely too much on their wholesaler for the second step and the wholesaler is incentivized by the insurance company to present a product that might not actually be the 'best' for that client.

I applaud your efforts and can not wait for the 'cleansing' of this industry to begin!

Investigation uses hidden cameras -- and Aunt Alice

Eva Linke — Sun, 13 Apr 2008 23:35:49 GMT

Hi Chris,

Please do some investigating on the companies that make and sell the products to the sales people. That's who they should go after. Too much is left up to the people selling them. The incentive is larger commissions.

Please go into what licensing is needed for selling the annuities. They only need an insurance license.

I could go on and on, but I won't.

Investigation uses hidden cameras -- and Aunt Alice

Bruce Hartrich, Indianapolis, IN — Sun, 13 Apr 2008 23:39:48 GMT

Please make sure you mention that there are a lot of honest guys out there. I am an Investment Advisor REpresentative and I also use Fixed Annuities and
Fixed Indexed Annuities. I do not call them Equity Indexed annuities because they are fixed indexed annuities. I also make sure my clients do not put to much into an Indexed annuity. And you know that many seniors don't need to much access to their money because some of them will spend their money to quickly if the access is to easy.
I have seen many seniors that have done this. One more thing to mention is many of the lawsuits that Attorney generals have filed have been over incorrect information. I know of one in CA that mentioned the maturity date which is a date that usually means nothing. Just be sure you think about telling both times.

Investigation uses hidden cameras -- and Aunt Alice

Claudette Slayden Lewisville, NC — Sun, 13 Apr 2008 23:52:39 GMT

I think this has happened to me - I did not realize it till your story- but started to investigate what I owned and found out that this 'financial advisor who everyone ( my friend ) said was the best - took me to the bank. He put me in this annuity that ties up my funds for 10 years - I did not know this - till after it was done - Hold on - not only did he coarse me to do everything NOW - I now earn 2.4 percent on a little less that ******* than I make 3 % on *******. He forgot to mention this - I just signed because he was so wonderful (just ask my friends) ---- DUMB DUMB -- Oh -- did I forget to mention that I will lose ****** if I take it early - less than the 10 years!

You really hit in on the button - they sell themselves as trustworthy. The are really just crooks -- I am going to move my money as I can -

I wish there was a way to hold them accountable for their actions -- but I am sure there is not. NO matter what some of will lose and they go to the bank --

Wish - I was smarter -- easy to trust than lose!!!!

Investigation uses hidden cameras -- and Aunt Alice

Kellie Cook — Sun, 13 Apr 2008 23:57:28 GMT

I work in the investment industry, specifically the Retirement market for a MAJOR bank/investment firm. I advise the Financial Salespeople at our retail branches about how to create investment and income plans for their clients. I work with annuities, mutual funds, bonds, etc. I want to reiterate what I've seen on this message board. ALL investments contain fees or risks of some sort. ALL investments need to be suitable for each client that buys them.

My problem with this broadcast is that Chris and his staff of "journalists" are feeding the culture of fear that exists in our news media today. To intentionally focus on the practices of some unethical and despicable salespeople is inflamatory and not doing anyone any good.

Why not do a fair report about the income problem that the majority of people face in retirement right now? We haven't saved enough as a country to live 25 or 30 years in retirement. Healthcare is outrageously and disgustlingly expensive in some cases. Social Security and Mediare will be gone in 20 years at this rate. I would just love to see an individual interviewed that offered an opinion other than the one Joe Borg had to offer which was "I wouldn't recommend these to anyone". That type of quote taken out of context is dangerous and could potentially hurt as many people as it might help.

PLEASE - let's get back to serious journalism instead of scare tactics. This broadcast makes me question the validity of your investigations now....

Investigation uses hidden cameras -- and Aunt Alice

L Jones Alpharetta, Ga — Sun, 13 Apr 2008 23:57:46 GMT

Chris,

I am watching Dateline as I write this message. You should also investigate "tricks of the trades" in the mortgage banking industry. I work for a MAJOR bank on the mortgage side. The same tricks are happening with mortgages. Trainging sessions on how to sell certain loan programs that are profitable to the bank. How to sell these programs that are not in the best interest of the borrower, but the best interest of the bank.

Investigation uses hidden cameras -- and Aunt Alice

judy, new port richey, fl — Mon, 14 Apr 2008 00:06:14 GMT

I'm sorry but I watched the program and you are acusing people of dong things they weren't doing. Each one said that there would be a penalty. No one lied about that. Everyone should read a contract before signing, and do their homework. No one should invest their entire savings in one product that has a penalty for early withdrawal. It's still useful for a PORTION of a seniors assets. You left out all info about death benefits-which are more likely to be utilized by the beneficiaries of these annuities. This was the most uncomfortable show to watch because you were exposing nothing and it seemed slanted. I am not an agent. I don't work in the insurance industry.I'm just a person who uses common sense and clearly heard each agent say that there were penalties for early withdrawal. As to the "fake" articles, well look in the newspaper at most retail ads. They make false and ridiculous claims. The consumer must be careful and look at what they are considering buying.
You should have more substance before you do damage to a product or industry. I was offended by the way you tried to make something out of nothing.

Investigation uses hidden cameras -- and Aunt Alice

Ann Anderson, Malta, IL — Mon, 14 Apr 2008 00:07:30 GMT

Chris, I wish I would have thought to contact you sooner. I live in Illinois. Back in about 1995 we invested foolishly in viatical settlements. We took all of our IRA CD's and transfered them into these viaticals because we were sold by a crooked insurance salesman. We even put our daughters money in one of these which was suppose to pay for her college education. It was suppose to come due in 1997, we still don't have her money and luckily she graduated with honors and was awarded scholarships and is now an accountant. We recommended our friends to this salesman and they invested too. We've all lost our money. In the last couple years we have become aware of several other people in our area who were taken by the same guy. One man has died and his family is still trying to recover the loss but don't think they will get anything. We would all be grateful if this scam could be brought out in the open.

Investigation uses hidden cameras -- and Aunt Alice

Thomas Miller, South Bend, IN — Mon, 14 Apr 2008 00:07:35 GMT

Chris,

When you asked Bob (the agent) what the penalty for early withdrawl was, it was the first time he had been asked that question. While his marketing practices were less than honorable, he did nothing wrong in comparing the penalty for withdrawl on the indexed annuity to a CD. They both have penalties for early withdrawl. In fact, he does tell the senior that he should not put the money in the annuity if he intends to withdrawl the money soon. Remember, there is a trade off... with an annuity, the owner recieves TAX DEFERRED growth, allowing that money to receive interest growth. That's not so with a CD.

Investigation uses hidden cameras -- and Aunt Alice

Gregory Allen, Beltsville, MD — Mon, 14 Apr 2008 00:07:37 GMT

I am very happy that Dateline is showing abuses by deceptive salespeople in the financial industry. As a financial advisor, I do not like seeing unscrupulous individuals giving the rest of us bad names. I would like to add that most of us are honest and do what is in our clients' best interests. I wish that Dateline had at some point added that annuities are appropriate under certain circumstances and had not used sensationalist journalism to make us all look like crooks.

Investigation uses hidden cameras -- and Aunt Alice

Roger Calabretta, York, PA — Mon, 14 Apr 2008 00:09:47 GMT

I just watched your Dateline segment and I understand how indexed annuities are bad for the elderly. You don't address whether they are good investment vehicles for younger people. Are they a good place to put part of your money if you have the ability to wait the ten or so years required? I have never used a blog before, does the answer get emailed directly to me?

Investigation uses hidden cameras -- and Aunt Alice

Gary Livingston Eagan, Mn — Mon, 14 Apr 2008 00:10:18 GMT

Dear Chris: Thank you for the wonderful report Sunday April 13. I am an insurance agent for 35 yrs. I have never or will ever sell an indexed annuity. These annuities do not serve anyone well exect the agent who probably cannot pass a securities license. I have been say for years to my clients stay away from this. Good work on making them tell the truth... finally..

Investigation uses hidden cameras -- and Aunt Alice

John Cronin, Milton, Vermont — Mon, 14 Apr 2008 00:10:35 GMT

Chris,
Great story, thanks for getting a message out that many state regulators have been trying to get out for several years. I am curious as to why the National Association of Insurance Commissioners was not discussed in your story, did I miss that part? Also, I heard nothing from the federal securities regulators, why not?

Thanks again, I hope you follow up!

Investigation uses hidden cameras -- and Aunt Alice

Evan Long, Russellville AR — Mon, 14 Apr 2008 00:10:49 GMT

I applaud you for most of the investigations including "to catch a predator" and such, but this one seems like you are twisting the situation around to make these guys out to be something they are not. They almost all admit if you want to withdraw the money early, you shouldn't put it in these type of investments. That should be the end of it. If your guy was more direct, he could have easily had a direct answer about the penalties. The only poor practice is when the flat out lie...which I only saw in the training class and with the magazine article that the guy didn't write...that is wrong and misleading. The rest is in the fine print...if nobody reads it, why does the law require it? Maybe if people in general were smarter, this wouldn't be an issue. I personally knew quite a lot about my mortgage when I signed off on it. I wasn't dumb enough to get an ARM loan, so why can't other people do their research? Same situation isn't it? Furthermore I'm not about to invite a perfect stranger in my house to offer him my life savings. Just not smart for anyone at any age.
Don't get me wrong, I'm against lying and intentionally misleading, but I saw virtually none of that on your show tonight.

Investigation uses hidden cameras -- and Aunt Alice

Mary Oring, North Olmsted, Ohio — Mon, 14 Apr 2008 00:12:29 GMT

Chris
Fabulous program on annuities! The same thing happenend to my 80 yr old mother and Lorie Taylor with Channel 8 news ran an investigation on my mom. My sister and I have been fighting this since 2004. My mother lost thousands and most of all she had to pay the irs 17,000 in 2006 this is not counting the penalties she had to pay. I am still working with the Ohio Insurance Commission regarding this "deferred annuity". Also they tied up my mothers IRA she was already drawing on. My mother was diagnosed with Alzheimers and passed away the day this aired on Channel 8. I would love to talk to you and send you the website so you can view the investigation report that channel 8 ran on November 26, 2007. You can do a search under Lorie Taylor's segments and look for "deferred annuities" and that was mine.
Hopefully your segment will help others from falling prey to these ground feeders. It broke my heart to see my mother so terrified because she lost all her money from her house and IRA.
Regards,
Mary O from Ohio

Investigation uses hidden cameras -- and Aunt Alice

Gary Livingston Eagan, Mn — Mon, 14 Apr 2008 00:14:17 GMT

Investigation uses hidden cameras -- and Aunt Alice

Linda Stiles, Homer City PA 15748 — Mon, 14 Apr 2008 00:14:25 GMT

Chris - I love this undercover operation on Annuities. My mother who lived on a small fixed income put some of her small savings in an annuity with Met-Life. Her agent was Mike Ulasky (whom she trusted fully) but me and my siblings thought there wasn't something quite right. She has conjested heart failure and was getting dementicia (not sure of the spelling). In May 2005 she ended up in the hospital and her doctor told my sister and i that she only had 3 months to live. I took her in my home and cared for her. In July of 2005 mom wanted to take her money out of the annunity and give us kids 10,000 each (there were 3 children and she started out with 16,000 and there were now 33,000 in there) since that was all she had she didn't want us having to pay money on getting the little bit she had. Her insurance agent met us here at my home and told us she could not draw any out of that but that he could pay her monthly checks, to which we believed. He told us he would clean out her folder and throw away what was needed to be cleaned out. We again trusted him and he took all the original paperwork. She died in 2006, now my sister - brother and i recieve a check every month for $105. for the next 10 years. There is nothing we can do about it because we have no paperwork and no proof. It is very heartbreaking that they can do that to the old people and have no heart. Would he have gotten paid to change that policy?

Investigation uses hidden cameras -- and Aunt Alice

Jeanne M. Day, Rutherfordton, NC — Mon, 14 Apr 2008 00:16:38 GMT

Dear Chris Hansen There is also one thing that I would elaborate on after viewing tonights story on the Index Funds, and that is although FDIC CD's are a much better and safer investment, be aware that with the latest premature withdrawal penalties, if you withdraw your principle too soon, you can still get back less than your original investment, as the penalties can be taken from the principle if there is not enough interest earned or credited to cover them.

Investigation uses hidden cameras -- and Aunt Alice

Joe, Indiana — Mon, 14 Apr 2008 00:20:39 GMT

I just watched the special on Dateline NBC about preditory Insurance agents, and Seniors. While I dont always appreciate the media and the way they report things Chris Hanson, and NBC, should be given a medal! As a financial professional I see numerous cases where Seniors have been taken advantage of. Its typical to see a case where an 80 year old has several hundred thousand dollars in an Indexed Annuity and has 15 years left of a surrendor charge. They need the money, but cant get to it. There is more about the annuities I wish Dateline would've disclosed, such as participation rates, bonus encentives, and the commission these "professionals" make each time they sell these "cant lose investments"... Thank you Dateline for bringing light to an issue that I have been fighting against for a long time now. Continue the good work! For all who read this... Please, Please be careful when it comes to purchasing an annuity of any type. While they do serve a good purpose for the RIGHT individual, they not the answer to everything... Often times there are other less expensive alternatives, that will meet your needs, and make us ALL happy!

Investigation uses hidden cameras -- and Aunt Alice

RD, Omaha, NE — Mon, 14 Apr 2008 00:20:50 GMT

The real investigation should be on the individual state's departments of insurance. They are the ones who approve each and every product. They are the ones who approve these 16 - 20 yr surrenders and high commissions. They are also the ones who "slap an agent on the hand" when they mislead somebody, but go after the company for hundreds of thousands of dollars, and still let the agent who was misleading continue to sell. The problem runs deaper than you may think... It's all about money and it isn't just the insurance companies looking to make a profit!

Investigation uses hidden cameras -- and Aunt Alice

kenneth bast,findlay,ill — Mon, 14 Apr 2008 00:22:06 GMT

I just watched your show re index annuties. I am not connected with the insurance industry, but I am retired. Your show focused entirely on early withdrawal provisions, without regard to the advantages of index annuities. It smacks of a show where you decide what you want to show and then try to prove it. You have taken a 60 minute mentality to a new low in television journalism.

Investigation uses hidden cameras -- and Aunt Alice

Marlys Dahlke — Mon, 14 Apr 2008 00:23:08 GMT

I am a senior with the very same annuity through Allianz you just aired on Dateline. It is the only retirement fund we have and the salesman that talked us into it was recommended by our local credit union. We could greatly use the funds invested in it to pay off our debt so we could retire but would loose a great deal. My husband is 70 years old with many major medical problems but is forced to work as am I as we can not live off of our social security.

Investigation uses hidden cameras -- and Aunt Alice

J, Miami, Florida — Mon, 14 Apr 2008 00:24:03 GMT

Dateline not giving both sides of the story is just as unethical as the agents out there trying to scam seniors.Lets do a Dateline about brokerage firms that lose seniors' money and now they have to go back to work just to survive. In many cases, Fixed Index Annuities are more liquid than the market, even with the surrender periods. Of course, if these ambulance- chasing lawyers didn't have deep pockets to go after, they wouldn't have anything to do.

Investigation uses hidden cameras -- and Aunt Alice

Ken Bauer, Barnesville, MN — Mon, 14 Apr 2008 00:24:07 GMT

I began as a career insurance agent in 11/82, and have over the years have become licensed as a series 7, 63, 65, 24, & 51 in the securities industry. I also completed the coursework to have the ChFC designation. I appreciated Chris' show on deceptive methods for selling annuities, and can assure the public, that the office that I oversee does not tolerate any of these practices; however, I have always been bothered by state insurance departments--or in the case of Minnesota, the Commerce Department--regarding one issue: Why do they approve products that should "generally" not be allowed to be sold to the public? Commissions rise with longer surrender penalties. That's simple fact. Why tempt agents by approving these products for sale in their state? Most products sold by agents with integrity have 3-10 year surrender penalties that trend down from 6%-10%. It appears to me that Attorney General Lori Swanson gets to be the "bad guy" in this issue because the Commerce Commission did a less than adequate job in its approval process.

Investigation uses hidden cameras -- and Aunt Alice

Jerry, Duluth, Ga — Mon, 14 Apr 2008 00:24:21 GMT

Hi Chris,
Great job on shedding some light on Equity Indexed Annuities. As a financial advisor I am disgusted by many of the insurance industry practices and unethical behavior of many fellow advisors. How can these EIA products exist? Simple, they are fixed annuities which means they are not filed with either the SEC or NASD. They are merely regulated at the state level. Unfortunately in your show you didn't have time to uncover the real deception with these products. The workings of these products can be so complex (e.g. monthly growth caps) that it is vitually impossible for the investor to "win" with these products. Show me a EIA with NO caps and a guaranteed spread (cost) of 1.5% or less and I'll buy it. Unfortunately I don't see this product ever evolving. For investors "safe" money they are better off with a CD.

Investigation uses hidden cameras -- and Aunt Alice

Janice Hatton Greenville, SC 29605 — Mon, 14 Apr 2008 00:24:43 GMT

I am 56 and about to retire. I was approached by a salesman representing "ING." I set up a 403(b)fixed annuity and money from my check was contributed to it monthly.I am to receive a larger sum of money as my retirement date gets closer. The salesman has called and I told him that I am not going to put all of it into this annuity. He seemed to get upset. I really not sure about this. Any tips?

Investigation uses hidden cameras -- and Aunt Alice

Katt, Topeka, Kansas — Mon, 14 Apr 2008 00:25:09 GMT

Dear Chris,
Great piece on the annuities. Would you pleae take this investigation one step further? Many of these insurance agents have turned from selling whole life policies to these so-called savings ventures. In any form, the consumer usually loses. The insurance industry is a billion dollar business, and many agents are unwilling to do the right thing rather than give up those lucrative commissions.

Investigation uses hidden cameras -- and Aunt Alice

GLORIA LESTER — Mon, 14 Apr 2008 00:25:11 GMT

I was watching your show on dateline nbc. I was shock to fine out their was someone who is concern about the annuity retirement money. I was putting my 62.0000 in ALLIANCE LIFE. WHEN I FOUND OUT MY MONY WAS GOING TO BE TIDE UP FOR 5YEARS I TRYED TO GET OUT OF IT. I WROTE LETTERS TO THEM. THEY WROTE BACK, SAYING IF I WANTED TO GET MY MONEY OUT I WOULD HAVE TO PAY A PENITALY OF 10,000.00. I SAID NEVER MINE I DIDN'T WANT TO GIVE THEM MY MONEY I WORK FOR ALL THOSE YEARS.I WOULD LIKE TO KNOW HOW I CAN GET SOME OF MY MONEY BACK .I FELL I WAS MISLED. ABOUT WHAT TO DO WITH MY RETIREMENT MONEY. CAN YOU POINT ME IN THE RIGHT DERECTION PLEASE. I'M 62 YEARS OLD.

Investigation uses hidden cameras -- and Aunt Alice

RAM, Clarkston, MI — Mon, 14 Apr 2008 00:25:38 GMT

Mr. Hanson,
I am VERY disappointed with what I just finished wathching tonight! The message was to stay clear about "indexed annuities". STAY AWAY. You should of made it clear that an indexed annuity may not be appropiate for certain individuals, but may for others. Being a successful manager for a national insurance company (we don't market any annuities), I can tell you that if you know your customer (client) and what their financial goals are (what the money is really intended for) an annuity with a 100 year surrender charge may be appropiate! Some of us really do tell the truth, the 'whole' truth and get called back when another CD may mature. You never mentioned any of the benfits about annuities and as in every business, there will always be questionable charactors. But to make it look like all annuity sales people are deceptive is deceptive on your's and NBC's part. Stick with the sexual predators! You can't make a mistake there.

Investigation uses hidden cameras -- and Aunt Alice

Barbara Carfagno, Skippack PA — Mon, 14 Apr 2008 00:25:52 GMT

I am so happy you did this piece on insurance agents and annuities. This is only the tip of the iceberg. Agents in Florida who worked for Met Life cheated my parents out of $25,000 from 'churning' their accounts. For 2 years I kept telling my mom something wasn't right. She would say, 'They're nice boys, their Christians!' They would wait until my dad went down for a nap, then they would pressure her to call up and move her annuitiy money around. They would end up paying huge taxes and the agents got their commissions! You have no idea how that broke my heart. My father died never knowing if we got their money back or not. I had to sign a statement saying that I would never harass the agent that did this to my parents! Can you believe this? Metropolitan Life Insurance Company, REMEMBER THEM!
I thank you for my parents and all of the elderly that have been taken advantage of.

Investigation uses hidden cameras -- and Aunt Alice

Ashley, Lubbock, TX — Mon, 14 Apr 2008 00:25:54 GMT

Here's one for you -- I was hit by these crooks twice in 5 years. First time, I was bald,in a turban while in chemotherapy for metastatic cancer - Two causually ganged up on me in an Olde office, and told me "Unit Investment Trusts" are the way to go "you won't lose any principle ... and " Second time, 4 years later, a bloke "representing" my Credit Union (I thought!) actually had to pick me up at a son's home (in a high-end neighborhood in Dallas) because by then I was legally blind and certainly could not read, nor see well enough to drive), and took me out "for coffee." His company was "X-something" in the San Diego CA area - to help me recover from the first losses ...he ended up putting what I had left in many, minute (small amounts) in Fidelity Funds (but not telling me), all front-end load (I had told him upfront "No-Load Funds" only); and I could never reach that man again after signing the papers. Two years later, I contacted every company I could think of and "found" the wasted funds with Fidelity--even Fidelity was shocked! I had nothing left after the crook got his "take."

I went to the Texas Securities Board, in person, and all they did was nod in agreement over my losses and told me, "He's high on our radar..." This is outright fraud. When someone's critically ill, or has a serious impediment to understanding, or the broker does not communicate with the client - it's illegal.

Fiduciary law requires absolute trust; full-disclosure the second money is mentioned. Philanthropy consultants must adher to fiduciary law, and so should anyone selling, brokering, presenting, moving, transferring, or buying funds -- aka "money."

I have nothing left, and still paying medical costs on my SS income without any retirement savings. President Bush is nuts - he backs these practices by "corporate America" and it's cruel, inhumane, illegal, and blatanly unethical.

Investigation uses hidden cameras -- and Aunt Alice

Douglas Dugan, Richmond, VA — Mon, 14 Apr 2008 00:26:51 GMT

Dear Mr. Wallace, I find it Ironic that you are accusing agents of missleading clients and telling only one side of the annuity story, since that is exactly what you just did with this report. You left out that annuities offer guarenteed income for life just like corporate pensions that are getting fewer and far between. People are living longer and longer and social security, according to our own government, will need major reforms in able to survive. There are good and bad annuities just like there are good and bad anything else. By the way, would your aunt be better off in an annuity that protects her money or in your employers stock (GE) that just took a bath?

Investigation uses hidden cameras -- and Aunt Alice

Wilbur LaBar — Mon, 14 Apr 2008 00:28:09 GMT

After reviewing your program tonight would MetLife be one of the companies under investigation. Thank you.

Investigation uses hidden cameras -- and Aunt Alice

Sheila Abrahams — Mon, 14 Apr 2008 00:28:29 GMT

Great program. I appreciate your investigative reporting. These are the kinds of sales tactics that the public urgently needs to be aware of.
I am a gray-haired little lady who is an easy mark for predators and smooth-talking salesmen.
I encourage you investigate unfair tactics in other industries as well - the public has a right to know!

Investigation uses hidden cameras -- and Aunt Alice

howard s — Mon, 14 Apr 2008 00:28:50 GMT

I have been in the finaancial services industry for 25 years and I have never sold an annuity to anyone. Annuities are a middleman product and the consumer loses in all cases no matter the type of annuity sold. The industry is at fault for a product with a contract that is so complicated that no one understands it. People who have an education in personal finance would never own an annuity. My advise is never sign a finanacial contract unless you have someone you trust there to represent you that doesn't work for a financial instutution.

Investigation uses hidden cameras -- and Aunt Alice

Maryann Sieminski, Oldsmar, Florida — Mon, 14 Apr 2008 00:29:25 GMT

I was shocked to find out I too have one of these annunities that I purchased in 2003. I am so upset that my money is "unreachable" until 2017. How do I file a complaint against this company and try to recoup my loss? Should I contact the Florida State Attorney Generals office? Any help would be GREATLY appreciated. Please advise.

Investigation uses hidden cameras -- and Aunt Alice

Lucy Leavitt — Mon, 14 Apr 2008 00:32:16 GMT

I bought an annunity which i am stuck for 15 yrs. they tell you all of the positives you get a bonas of a lg. some they tell you to thust them they dont tell you honestly how much of a big fat check they get for tying up your money. namely North American Company.

Investigation uses hidden cameras -- and Aunt Alice

celeste saliga, munster, indiana — Mon, 14 Apr 2008 00:32:38 GMT

at a time in this country when investments are in a downturn I think you ought to show the good side of people who do a great and scrupulous job of helping people save money. In this country people only save 3% of their paychecks while in china people save 30%. Almost every person I know has an idea that there will be a surrender charge for early withdrawal of money in an annuity. Please.......

Investigation uses hidden cameras -- and Aunt Alice

tony boyle, highland , mich — Mon, 14 Apr 2008 00:38:12 GMT

Just watched the show. It was eyeopening. I take the word of my advisor and dont really question him. I will from now on and will start doing more home work starting tomorrow.

Investigation uses hidden cameras -- and Aunt Alice

Linda, Chicago suburbs, IL — Mon, 14 Apr 2008 00:38:46 GMT

To Chris Hansen at Dateline
While I am the first to admit there are skunks in the insurance business. After having been in the insurance industry for18 years - I have seen it all and met many disreputable agents who will say and do anything for the sale.
I applaud you for enlightening people to the unethical people in the insurance industry. They have always and will always be there. BUT -I take exception to your ONE SIDED expose on Equity Indexed Annuities and the agents who sell them. While showing the scum of our industry, you failed to talk about the hones agents who do thing ethically; who disclose the terms of the contracts; and who make sure the product fits the client.
All you have done is to scare all seniors and to damage the honest sales people trying to make a living. I am all for getting the fox out of the henhouse, but not at the expense of killing all of the hens to do it.

Investigation uses hidden cameras -- and Aunt Alice

Mr. K, Des Moines Iowa — Mon, 14 Apr 2008 00:39:37 GMT

Chris, I appreciate what Dateline is trying to accomplish but let's not loose sight of what the real problem is. The real problem is not with the Insurance Industry/Financial Services Industry it lies within individuals wanting to put themselves before others for greed. I personally have been in the industry for over 15 years and am proud to say I base my recomendations ALWAYS on what's best for the consumer! Forget what I get paid, I can go to bed at night with my family knowing that my recomendations wouldn't have been any different if I were dealing with my Mother or Grandmother. If one thing could have been different from tonight's telecast it would have been to let the Insurance Companies have a voice in the process, remember most agents shown tonight are independently licensed agents; there is greed in every industry (unfortunately). Fixed Index Annuities themselves are not bad products (do not call them investments) but they are not right for every client. Lets agree that full disclosure and suitability are "real issues" facing seniors today, and together we can make this a better place. I expect that NAFA will have a response to your telecast within the next 24 hours.

Regards,

Mr. K

Investigation uses hidden cameras -- and Aunt Alice

s a gordon — Mon, 14 Apr 2008 00:39:39 GMT

I just saw the program and want to know where to turn in an abuser of the annunity sales. I still do not have the paper work for an annunity that I singed up for on 1/10/08. I still do not have the policy in my hand. He tells me I have a 30 day right to refuse. How can I do that when I do not have the product?

Investigation uses hidden cameras -- and Aunt Alice

John P. Jakeway Rockford MI — Mon, 14 Apr 2008 00:44:46 GMT

Hello,
Merril Lynch sold me an annuity about
3 years ago. I had no idea what an annuity was at the
time. There was some mention of surrender charges.
I had no problem with those charges. The time period
that was first mentioned to me was 6 years. Later I
found out through very persistant questioning that I
would not be able to get at my money until 59 1/2
according to Merril Lynch. I'm currently 46 years old. Dateline probably has just the tip of the iceberg with brokerages selling these financial entities. Not mentioning the penalties
and time periods was probably common practice. Do some more checking. We are talking mainstreem
brokerages. Some people who got hooked are
embarrrassed to say. I've got an
inkling that this type of selling was common practice
in the past 5-6 years. Brokeages certainly were not
making the great commissions they made back in the 90's. Where would they make up for those commissions?
Annuities!

Investigation uses hidden cameras -- and Aunt Alice

Jeff Leonard, Melbourne FL — Mon, 14 Apr 2008 00:45:42 GMT

Hi Chris,

I just finished watching the segment and I am very dissappointed with the sources provided by NBC in this study.

First, having Joseph Borg give his opinion of Fixed Indexed Annuities is a JOKE. He is a stock broker! He represents many other stock brokers who compete with the insurance industry for the very same business. No wonder he might not have anything good to say about Fixed Indexed Annuities. The only thing Dateline did by having Joseph Borg on as a credentialed expert was to help him get re-elected.

Second, Lori Swanson is politically motivated as well and her opinion as to how much information is enough during an initial interview is subject to conjecture. Based on this show, Lori's opinion reveals that surrender fees should be the first thing discussed. When purchasing a financial instrument of any type you need to understand whether the strategy is suitable to meet the clients needs. This process alone typically takes 1-1.5 hours. Also, annuities are commonly the most misunderstood investment because they are sold by both stock brokers (variable annuities) and insurance agents (Fixed Annuities). This competitive relationship in the market is the root of most of the misunderstandings. So, a financial advisor must first understand the clients needs before recommending any type of investment product. Did Lori sue Enron, Lucent Technologies, Worldcom and Bear Stearns for the millions of stock holder equity lost? Think not.

As for the content of the show, I was also dissappointed at the level of abuse uncovered by Dateline. There was too much emphasis put on the surrender period and surrender fee. In my practice I go to great lengths to ensure my clients have enough money to invest long term in a tax-deferred annuity. Like other financial products there are good and bad, but with annuities the focus on surrender and liquidity can vary greatly with the product chosen. You used the scenario where what happens if I need to gain access to my money in case of a tragic event. Well some annuities provide provisions for terminal illness, Long Term Care requirements and Death benefits. If these are true concerns and needs, then the appropriate investment should be selected.

Finally, I can give you a couple of guys worthy of most wanted status for your show. One would be an insurance agent and the other a stock broker. In both cases, the individuals are greedy me-first scum bags. I hope you do a follow up to show what a good insurance agent can do for an individual's portfolio who does not want to lose their money in the stock market and would like to go to bed every night without the fear of waking up to find out that over the weekend another financial or telecom giant has declared bankruptcy.

Also, it should be noted that some of your sponsors for this evenings show would have a vested interest in seniors choosing equities in the stock market versus insurance based products. So to have your final question be "Would you recommend an Equity Indexed Annuity?" With your senior responded saying "NO", is clearly a very biased and misinformed recommendation.

Sincerely,
Jeff Leonard

Investigation uses hidden cameras -- and Aunt Alice

Matthew Taylor, CFP, Harrisburg, Pennsylvania — Mon, 14 Apr 2008 00:45:48 GMT

Dear Chris,

I wanted to bring to your attention two important facts you either don't know, or chose not to mention.

Firstly: Most Indexed Annuities, including the exact ones you criticized, have waivers of surrender charge in the event of terminal illness, long-term care, or death. So Aunt Alice could get to a substantial percentage, if not all, of the money she deposits into an Equity Indexed Annuity.

Secondly: The product you criticized with the 20% surrender charge pays the client an upfront bonus of 10%. So if Aunt Alice deposited $100,000 into that Equity Indexed Annuity, her account value would be $110,000. If Aunt Alice were to take a full surrender in the first year, the 20% surrender charge is assessed against the $110,000, returning to her $90,000. Thus the net surrender charge to her principal is 10%. Not the 20% you implied. Do you think Aunt Alice could lose 10% in the market in a year's time?

-Oh, and by the way. If she withdrew $50,000, half of what she started with, the surrender charge would simply take back the bonus she was paid. Leaving Her remaining $50,000 intact.

If you re-run this episode, please include these facts.

Investigation uses hidden cameras -- and Aunt Alice

Dr. Thomas Maronick, DBA, JD — Mon, 14 Apr 2008 00:46:48 GMT

I have served as a marketing expert in class action cases against insurance companies selling annuities, including Allianz. The surrender penalty is only one problem -- one that is disclosed. Look at the "Point to Point" feature. Appreciation in the stock in an equity indexed annuity is determined on the first and last day of the year and it is usually capped at 10-15%. That means that, if the stocks in the annuity increase by more that the capped amount, the company keeps the rest. Also, the appreciation is only in value of the stock as measured by the stock prices. The company keeps all interest and dividents. Thus, the company has an incentive to invest in high dividend stocks rather than stocks likely to appreciate. In addition, any money taken out during the year looses any appreciation in value, even if taken out on the next to last day of the year. Again, to the benefit of the company. Finally, some annuity firms (including Allianz) tell their sales reps to tell their senior customers NOT to tell their children what they're doing -- because the children might as the kind of questions Dateline raised.

Investigation uses hidden cameras -- and Aunt Alice

GIM, Charlotte, NC — Mon, 14 Apr 2008 00:47:54 GMT

Dear Dateline Staff:
I am a licensed insurance representative for over 25 years and have been licensed in many states. Most of the agents I know are solid, professional people who do not use any of the tactics discussed tonight. I can say that I helped many clients, including seniors, with their financial needs including annuity, life insurance and Long Term Care issues. Not once did Chris Hansen state that most insurance reps are honest and caring people that do the right thing for their clients. Also, many insurance reps hold industry designations such as CLU, ChFC, CFP, CSA and others that are issued by quality schools and required many hours of preparation and national exams before accreditation. These designations require continuing education so that a rep can stay current on any changes that might affect our clients. Most carriers require that insurance reps perform suitability reviews before a product is discussed with a client.
Why wasn’t any of the above mentioned on Dateline tonight?
One-sided reporting threatens more seniors who now might not trust any insurance or financial services reps, even the good ones that can help them.
GIM, Charlotte, NC

Investigation uses hidden cameras -- and Aunt Alice

The Honest Rep, OHIO — Mon, 14 Apr 2008 00:49:15 GMT

Unfortunely these same practices occur in Ohio. Many of the insurance agents once held a securities license...until the state of Ohio revoked their license! Equity Indexed Annuities have given these crooks I mean agents an opportunity to sell high commission products and stay in the "investment" business. Tighter regulations on insurance agents need to be put into effect before granted permission to sell these products. It never hurts to google the agents full legal name to learn more about who are conducting business with.

Investigation uses hidden cameras -- and Aunt Alice

Bill Nagle, White Plains, NY — Mon, 14 Apr 2008 00:49:34 GMT

Very good story. But I think that making the agent who is selling the annuity the villan may not be entirely fair.

The salesman is, after all, acting on behalf of a company who has encouraged him to sell the annuity. While not entirely without fault, do you not think it possible that the agent truly believes he is selling a product well-suited for his customers without actually having fully thought through what the consequences of trying to get to one's money early.

Should you not have also tried to interview the actual insurance company who has issued the annuity?

After all, all the salesman is doing is tryi to make a living, and if this is what the insurance company has told him to sell, and he does not do it the way he has been trained, then he risks losing his job.

Put another way, how many insurance agents you encountered would be in a position to say they were not going to sell something they had been told to sell, and not be concerned of the possible consequence of losing their job or worse being black-balled?

Investigation uses hidden cameras -- and Aunt Alice

Stephanie Wills, New Philadelphia, Ohio — Mon, 14 Apr 2008 00:49:40 GMT

Help. My step mother took my fathers money when he was in a nursing home and was talked in to buying an annuity by her daughters man friend in Florida ( Investors Insurance )...She lives in Michigan. This guy made $10,000 on this sale and we can not touch the money ( we had to sell his home to pay for the nursing home and meds etc. ) for another 5 years, or until the step mother dies...she was named as the annuitant but the money belongs to my fathers trust..and she has no claim to it. Who should we contact about this ? Can I get help ?? I live in Ohio. My Dad passed away a year ago. Thanks

Investigation uses hidden cameras -- and Aunt Alice

Mark J. Herren — Mon, 14 Apr 2008 00:50:28 GMT

I used to attend the same Church with Bob Bradford in Tuscaloosa, AL. and was always suspicious of how he made such a "good living". He drove the best vehicles and had a better than average home and a good Family Life. How can a man that is supposed to wear the title "Christian" do this to the elderly ? It goes to show you that you never really know a person's secret life and what they are capable of doing to others. I would not be able to sleep at night with that guilty of a conscience !

Investigation uses hidden cameras -- and Aunt Alice

Bert Livingston — Mon, 14 Apr 2008 01:00:46 GMT

Chris, I just fionished watching your show on annuities, as a 30 year experienced agent who has sold these types of annuities I applaud the exposure of the hacks in our industry. You should know that the top ranked annuity companies and Indexed products do nopt have surrender penalties of 20% and 16% etc. and 16 years of surrender penalty time periods. Most start at 7% and decline over 5-7 years. Also, technically, the longer the penalty period the more a company can pay in interest benefits...very much like a 5 year CD pays more than a 30 day CD. In addition, the commissions on those 20% surrender penalty contracts are enormous...those with shorter penalty periods pay agents much less. Thanks

Investigation uses hidden cameras -- and Aunt Alice

Todd Marley — Mon, 14 Apr 2008 01:04:02 GMT

lets see how much of John Does 100,000 k he would get back if he needed it today.had he invested in a mutual fund, variable annuity or stock.

Investigation uses hidden cameras -- and Aunt Alice

Kathy, Milwaukee, WI — Mon, 14 Apr 2008 01:05:47 GMT

There are different types of annuities, and some types are not right for everyone. No one should be investing their entire life savings, especially if it is only $40,000 in only one investment vehicle.

Responsible reporting calls for presenting all sides, and not just painting a "negtive' picture of annuties. I do believe they are not for those who cannot afford to place money aside that might have to be used in an emergency.

Wise investing requires some research and responsiblitiy.

Investigation uses hidden cameras -- and Aunt Alice

Nancy Greenstein — Mon, 14 Apr 2008 01:06:23 GMT

Dear Chris, We have always watched 60 minutes, but after tonight your show will be on our DVR. Thank you for exposing the annuity scam. My Dad (9l years old, WW II Vet) and Mother (88) have been scammed by NY Life. I have been trying without success to get legal help they can afford. Are there any class action suits that our family may participate in? MANY, MANY THANKS FOR YOUR STORY

Investigation uses hidden cameras -- and Aunt Alice

Phil, NC — Mon, 14 Apr 2008 01:08:33 GMT

I think it's very irresponsible to report only the bad salesmen/annuities. There are many good insurance agents out there who are doing all the right things and there are also good annuities. You portrayed all annuities as being bad and it's just not so. Be fair and report the good along with the bad!!

Investigation uses hidden cameras -- and Aunt Alice

Susie, Denver CO — Mon, 14 Apr 2008 01:08:34 GMT

Dear Chris,
Interesting that you had a commercial for an AXA Annuity on your Dateline special, which exposed insurance annuities. What's up with that?

Investigation uses hidden cameras -- and Aunt Alice

Brad , Florida — Mon, 14 Apr 2008 01:14:11 GMT

Chris,
I found good and bad in your Dateline show this evening.
I found the annuity university scare tactics to be disgusting. I think the use of fake titles is horrific.
I found that nonsense on the FDIC going broke to be so
pathetic, I can not believe anyone would believe that BS.
Be fair, their are reputable people in this industry.
Any product that is sold has to be sold correctly.
The gentlemen that had only $40,000 to his name, had he come to me, and many like him do, would have been told to march down to his bank and leave his money in a 100% liquid money market/savins/checking account.
Suitability Suitability Suitability: I stress it.
Had I been their, I would have told the gentlemen that he has no business going into a EIA.
I would have told your aunt that the only 100% liquid place to put her money would be a bank money market/savings/checking account.
I also make sure that everyone that seeks out my advice makes sure that they have liquidity/cash on hand.
I have told thousands of people that having your money in a good bank/liquid can not hurt you.
I also stress to people that they take their time, due their due diligence, ask questions.
I personally have my Retirement monies in Allianz EIA's and I continue to fund my Retirement monies yearly in Allianz EIA's.
Allianz is an excellent company. I represent numerous companies and have done so for over 27 years.
I was dumb founded thou that the AL attorney general & the MN attorney general did not mention the billions of investor's dollars lost in Bear Stearns, Citi Group, Merrill Lynch & Countrywide stock to name a few.
Amazing how many pension funds invest retiree's money in those companies.
I would also like to point out that lic. stock brokers and banks sell Variable Annuities with high fees and expenses. These products actually lose principal due to market conditions regardless of surrender fees. (double whammy)
Every person needs to do their due diligence before placing their money in any investment/savings product.
I was also wondering when the AG of AL & MN will start looking into the non-sense wall street is pushing on the senior market.
The SEC has been very negligent in supervising it's own brokers.
I will end my comments to you by asking you these questions?
How can Merrill Lynch's CEO walk away with over $161,000,000 dollars while on his watch his company lost over $12 billion.
How can the CEO of Countrywide walk away with hundreds of millions of dollars after almost bankrupting his company.
How can the CEO of Bears Stearns smoke pot, play golf and bridge while his firm lost over $9 billion in hedge funds.
Don't these firms come under the watchful eye of the SEC.
Where was the SEC when all of this was going on?
What is the AG of AL & MN doing about these firms?

Investigation uses hidden cameras -- and Aunt Alice

Derek Ketel, San Antonio Texas — Mon, 14 Apr 2008 01:20:54 GMT

Chris -

You failed to mention 2 thngs about the Equity Indexed Annuity issue.
1 - The agents that "Sell" them do NOT have to be securities licensed to sell them, they only have to be insurance licensed so they do not have to meet the same requirements or face the same consequences of poor sales tactics.
2 - Because they operate in a regulatory "No mans Land", they have little consequences. The state insuranec and securities regulators cannot enforce anything and Federal authorities like FINRA have no jurisdiction either.

I have worked in the securities and annuity industry for several years and some annuities have merit but others like the annuity products mentioned in the story have no purpose. The simple test to see if there is something to hide is to "Google" the company that sells the product and see if they have any mention of it on their website. The Allianz products when "Googled" show only reps selling them, no product details at all.

The only thing worse that these Insurance reps do to sell them is instead of doing the free dinner seminar, they do seminars in a CHURCH!

That is why clients looking for financial advice should either do their own investing or work with a LICENSED financial advisor who can assist them with all of their financial needs, not just insurance or retirement so they can see the whole picture and offer advice based o nthe whole client picture, not just a small snap-shot.

Investigation uses hidden cameras -- and Aunt Alice

Joseph T. Wielgus/S&W Prec.Tool Corp, 43 Evergreen,Bayonne,N.J. — Mon, 14 Apr 2008 01:21:33 GMT

Dear Chris,
Your program was excellent on insurance annuity. Being a business owner over 35 years I was asked to help my saleperson fro SENTRY Insurance. I invested $ 50,000.00 and then 25000.00 and was told by the ales representative that the money was going to be invested in Mutual Funds. I asked if it would be availble if I needed to payout an employee and I was told Yes, no problem. The sallesman's name was Stanley Polnik. After I had a problem with my property insurance where they didn't want to pay me for business interuption Ins. I decided to dump all of Sentry. life, health,Blue Cross, & uilding + ANNUITY. Then and only then was I told I would stand to lose half of the money. I had to leave it 16 years and they had sent me a booklet on this 3 months after i made the investment.
You hit the nail right on the head. Sentry Insurance is no better then the others. If yyou don't have a good agent you have NOTHING.My old agent form another company found a flw in their contract so they had to pay me something for the 2 weeks we had to close, under business interuption.
Your sshow was excellent. Please keep it up.

Investigation uses hidden cameras -- and Aunt Alice

Craig Boes, Metairie LA — Mon, 14 Apr 2008 01:25:16 GMT

Dear Chris,

I wish that we had known then what we know now. My husband and I invested over a million dollars in a so called life insurance policies that was intended to help us to invest our money and keep it there for retirement.As the years progressed, we saw that what we had initially invested was being depleted and the bills kept coming for us to continue paying on these policies. After realizing what was going on, we put a stop to the investing and activity on our account. We took them to court and lost, not because they were notfound guilty, but, because we did not file action against the insurance co. in a timely matter. The truth of the matter is you do not have to be elderly or uneducated but more unsuspecting and trusting of those which seem to pretend to have your best interest at stake. While your segment hit home I would like to see a more expanded version covering deceptive practices of investment and insurance brokers. Please contact me if you consider pursuing a topic which I regret to be all to familar with.

Investigation uses hidden cameras -- and Aunt Alice

Janet Tyrrell, East Kingston, NH — Mon, 14 Apr 2008 01:26:30 GMT

Hi Chris,

We watched your segment regarding insurance agents taking advantage of Seniors an Index annuities and the sales tactics used to convince seniors to sign over their savings. well done Chris

My husband might have fallen for their tactics. Is there a list of suspect companies other than those mentioned on the show? Is Bankers Life one of them? J. NH

Investigation uses hidden cameras -- and Aunt Alice

KC, UT — Mon, 14 Apr 2008 01:28:43 GMT

Now I'm scared to death. Five days ago I purchased a WRL Equity Index Featured Flexible Premium Adjustable Life Insurance Policy. Did I make a huge mistake? I don't have money to lose. I want to retire in 3 years and I may need to make withdrawls to get by. Do I lose all the interest? Do I have to pay back the loan plus make my scheduled payments ontime. Which I probably can't so if I need to borrow. I gues I have another 5 days to change my mind. This story frightened me more than retirement had. Please tell me where I can go for neutral advice. Thanks.

Investigation uses hidden cameras -- and Aunt Alice

Brian Barriger, Northville, Michigan — Mon, 14 Apr 2008 01:34:29 GMT

Hi Chris,

Great story. What you did not mention also, is that the insurance reps selling these annuities, and other similar annuities, make a 10% commission on sale, on average, (the highest commission rate on the planet)which the insurance industry highly promotes to the selling reps. In fact, insurance companies actively compete with each other over selling reps, with who can offer the highest commissions to the insurance reps. The additional internal fees in these products are enormous!!! Furthermore, these reps are "motivated" with lavish tropical (Hawaii, Fiji, Tahiti,...) and European (France, Italy, Switzerland, Spain,...) vacations when certain sales levels are achieved. Finally, these insurance companies then encourage their selling reps to go back to the clients a few years later (typically 2 years) and pitch a new "improved" annuity deal to the buyers -- thereby generating "Surrender Charges" on the back-end AND generating a new 10% commission upfront to the selling reps -- and potentially more vacations. These insurance guys are worse then politicians. How do you think that AIG, ALLIANZ, Prudential, MetLife, ING and others got to be among the largest financial institutions in the world -- not from helping their clients, that for sure. I have been an investment advisor for 22 years, and I have always believed these products to be a scam, by and large. I have always felt that you could align these insurance reps with used car salesmen, in terms of low integrity and character, because not surprisingly, that is where a good number of them transfer in from. Again, great story.

Best,

Brian Barriger

Investigation uses hidden cameras -- and Aunt Alice

Dan, Iowa — Mon, 14 Apr 2008 01:36:36 GMT

Chris:

I've been reading through this whole blog, and it seems that too many people are happy to correct you on the good and bad of annuities, and then mis-lead you by telling you to go after the brokers who sell stocks, or that variable annuities are totally terrible, or that the real bad guys are the ones who work in banks and sell annuities.

I'm a registered investment representative and I work in a bank environment. The people you found for your segment were less that "upfront" with their clients. They didn't want to tell their prospects about the withdrawal penalties, because they were terribly long...longer than most withdrawal penalties on annuities...even Equity Index Annuities. I think if you review withdrawal penalties on annuities, you'll find plenty of them that run out in the 5 - 9 year range. Even the equity index ones. Your aunt might like to look at one of these, because they do usually guarantee you against loss - you can typically take advantage of the upside of the markets and not have to take a negative return...ever. If you visited with some of the boring accountant-types at the insurance companies, they would probably tell you how they accomplish that. You should also know that annuities almost always (there might be some that don't) offer some sort of liquidity on a short term basis - many as soon as immediately. That liquidity is often limited to 10% of the account value, but that's much better than that CD would offer. Also, your aunt might not like that old CD about 7 years from now when she cashes it out and finds that the money her money grew to won't buy nearly what it could have with the original amount 7 years earlier. I'd like to see an expose' on bank CDs and whether or not they EVER keep up with inflation.

Fixed annuities...variable annuities...stocks...bonds...mutual funds...they all have a place in investing, and people need to visit with their kids, nephews & nieces, spouses, brothers & sisters or anyone else they trust when they're investing. Then, listen to the facts, and if a question isn't answered clearly, ask it again. The scum don't want to take up too much time, and they'll bail as soon as it begins to get too tough. Final advice...try to do business with someone you know and trust, not the guys who is breezing through town and you'll never see him/her again.

Investigation uses hidden cameras -- and Aunt Alice

Jan Oklahoma City, OK — Mon, 14 Apr 2008 01:37:45 GMT

Thanks for warning Seniors about fixed indexed annuities. I purchased one in 2006 and am very pleased with it. I earned over 12% plus an up front bonus. I am guaranteed 3% and am anxious to see what I earn this year in a down market. Whatever, my principle is safe. At this time in my life that is important to me. A good agent would never encourage you to put all your funds into one. Please tell the other side of the story.

Investigation uses hidden cameras -- and Aunt Alice

Leslie P. — Mon, 14 Apr 2008 01:38:21 GMT

At the end-of-the-day, you insurance agents know it's all about your compensation. It is not untypical commissions are in excess of 10%. Agents will say it's slightly less than that. What they would fail to tell you is that the agency they are contracted/licensed through have commission contracts that typically match the respective surrender charge. Higher surrenders and periods...higher the commissions. Enough jive talk...it's about time someone has caught you hands in vulnerable and unsuspecting consumers' & seniors'cookie-jars.

Investigation uses hidden cameras -- and Aunt Alice

Brian Barriger, Northville, Michigan — Mon, 14 Apr 2008 01:44:13 GMT

Another point to mention, is that while it remains to be seen how well the client will, or will not do in the investment, it is clear that the selling rep will make his 10% commission on the deal, and the sponsoring insurance company will be paid extremely well through the huge internal fees. And maybe a vacation as well for the selling rep, if he or she can sell enough of these annuities!! What a deal. And they don't even use a gun during the crime!!!

Investigation uses hidden cameras -- and Aunt Alice

Tim, Baltimore, MD — Mon, 14 Apr 2008 01:44:14 GMT

Lousy story. Really. I wouldn't want to be the prosecutor on any one of those guys even though they were clearly sidestepping the negative aspects that should have been made clear. Why didn't they let at least one interview go all the way through to the paperwork so there would be no deniability about what they intended to say before the final sale?

I also think they may have missed a few important smoking guns. Did anyone check to see how many agents the instructors receive overwrite commissions on? I would fully expect to find out that these instructors are also a recruiting engine and make their real income from overwrite commissions on the agents they instruct.

They didn't point out that the penalty phases in the story were ridiculous compared to other products available. The products being pitched in the show are the high commission products designed for agents, not consumers. I had never even heard of a penalty period as long as 20 years! I stopped even considering selling annuities whose commissions were extraordinarily high because they are always lousy products. Dateline didn't dig very deep, and the attorney general did nothing to balance her negative comments by contrasting these products with products better suited to clients in the age bracket of the role playing clients.

I forget the official's name with the silver hair, Joe somebody? The dateline reporter asked him "but in fairness the guy did leave her the brochure. Isn't it the client's responsibility to read these materials to understand what they are buying?" The official's response "I don't think people read the papers they sign to buy their house, much less this stuff..." WOW! What a stupid comment. There is a big difference between thousands of words of fine print in your closing documents and a brochure putting the penalty structure in plain english and 12 pt. type. More importantly, if Joe's opinion were shared by the legal system we wouldn't have scores of people losing their homes right now. He clearly just didn't want to give the agent any benefit of any doubt.

Finally, I do not think the sales presentation we saw are typical. A lot of us let the chips fall where they may and do just fine. I don't even have to be asked about the withdrawl provisions or penalties, it's explained in my basic explanation of the product before I open things up for their questions. Also, people should certainly be told that this is no place for money they may need for a roof repair, to help with a grandchild's college fund, etc.

Finally, I have to wonder how many sales presentations they filmed to get these examples. Why don't they disclose that? Hey Chris, where were you during the sub-prime lending party?

Investigation uses hidden cameras -- and Aunt Alice

Mari, Texas — Mon, 14 Apr 2008 01:50:22 GMT

This really hit home for me - I've been spending many sleepless nights worrying about my annuity and wondering what went wrong. When I bought my annuity - it's a variable annuity (not really sure what the difference is)in 2001, I was made to think that it was a pretty safe place to put my retirement money and draw an income at the same time. I'm a widow and took an early retirement offer because of problems I was having with my teenage son. I needed income so my financial adviser told me my best bet would be a 72t variable annuity. Supposedly, I would be able to draw a monthly income and still have at least the principal by the time I was 59 1/2. Maybe that would have been the case had it not been for Sept. 11th. My account took such a beating that I have never recovered and instead, the account is going backward. At this point, I'm not even sure I'll have enough to last me until I'm 59 1/2 (3 years). To make things worse, based on some research I've been doing, if my account runs out of money before I'm 59 1/2, I'll owe the IRS penalties on all the money that I have drawn out since 2001. Doesn't make sense! I'll lose all my money and then owe IRS on top of that. Every day I watch my account shrinking at an alarming rate and it's becoming more and more likely that my retirement money will run out before I'm 59 1/2 and I can't do a thing about it. I've asked my financial adviser that sold me the product what I should do and he says I should be putting some of my monthly income from my annuity into another annuity while the markets are down and I can get in at bargain prices. I guess that means he would make another sale. I don't know who to go to for advise that will not try to sell me something. I'm working again and trying to save as much as I can but I can't keep up with what I'm losing. It's devasting to watch your hard earned money just melt away right before your eyes. Advise anyone?

Investigation uses hidden cameras -- and Aunt Alice

Bernard Young,Capitol Heights,Maryland — Mon, 14 Apr 2008 01:58:36 GMT

I saw your show on Index Annuities and since these are insurances product of course the SEC is going to give them a bad name.Just like the SEC have dishonest representive so does the Insurance industry.I am an insurance agent for Allianz and I was surprise not to see the agent marketing Allianz not use the Suiteability Form issued by Allianz I use.It helps determine if an index annuity is right for them.Just like any other profession,it's ashame that the people who represent your industry with honesty and professionallism have to be link to a few dishonest ones.

Investigation uses hidden cameras -- and Aunt Alice

Glenside, PA — Mon, 14 Apr 2008 02:02:21 GMT

Hello Chris! I enjoyed watching your program this evening, but just as you were trying to point out how agents are taking advantage of seniors you were also giving my industry a black eye for the ethnical agents that follow the rules and the real purpose of annuities. I am an agent with a AAA rated company and I donot sell equity indexed annuities. I sell fixed annuities to most senior clients with usually 7 year surrender periods. It would be great if you could follow up tonights program with a program that focuses on the agents that do good jobs for seniors.

Investigation uses hidden cameras -- and Aunt Alice

Tom,Scottsdale,AZ — Mon, 14 Apr 2008 02:08:16 GMT

Chris,

You talked a lot about the surrender charges, but you really need to discuss the actual performance of these contracts. I was a broker about 10 years ago and sold a few of these contracts at that time. My clients were lucky to make 2% on their money in a roaring market. If someone is looking at a specific contract from a insurance company, the agent needs to show them actual performance on the contract over the past 5 years before they should even consider the product. Several of these products have a MVA or Market Value Adjustment that moves the principal with the actual bond market. If a contract has a MVA, and interest rates rise, then the surrender value can increase above the actual surrender charges. It can also work to the benefit of the annuity holder if rates decline.
In addition, the size and length of the surrender period determines the size of the agent's commission.
Any quality annuity product should have less then a 10 year surrender to the product. Most companies will offer several products that do exactly the same thing, yet they have different surrender periods and commissions to go with them. Many of these agents sell the highest commission products because it is the easiest money they will ever make. The 16 year product that the one agent discussed, probably offers the agent a 12% to 15% commission. A quality contract that truly benefits the client would not pay more then a 5% commission and not have more then a 7-10 year surrender period. The best annuity products are the simple vanilla fixed rate products with reasonable surrender charges. When there is a commission conflict of interest that isn't disclosed to the client, the greed can definitely get in the way of doing the right thing.

Investigation uses hidden cameras -- and Aunt Alice

Wayne, SE Michigan — Mon, 14 Apr 2008 02:10:57 GMT

A 10 year fixed index annuity works for me. I am 59 and invested 1/2 my 401K in a 10 year contract with a 7.5% signing bonus. I can take out 10% a year, no loss of principal, and will share in about 75% of realized market gains. Early withdrawal penalties will not be an issue with me since I have other options available.

Investigation uses hidden cameras -- and Aunt Alice

Mari — Mon, 14 Apr 2008 02:13:20 GMT

How do you file a complaint against an insurance company and agent if you feel you were misled in the purchase of an annuity product?

Investigation uses hidden cameras -- and Aunt Alice

Vijay Kalra , Tampa , Florida 33614 — Mon, 14 Apr 2008 02:14:54 GMT

Yes there are many crazy sales associates , their licences should be cancelled forever without giving them chance to clarify .

vijay kalra

Investigation uses hidden cameras -- and Aunt Alice

Jake, Phoenix Arizona — Mon, 14 Apr 2008 02:18:44 GMT

Another scam are the insurance Agents who pass themselves off as knowledgeable in Estate Planning Law and install fear in the Senior regarding Probate. They then sell some sort of pre-formed Revocable Trust document and dive into Annuity pitches once the assets of the Senior are revealed via the Trust

Investigation uses hidden cameras -- and Aunt Alice

Jane Reeves, Winfield, KS — Mon, 14 Apr 2008 02:32:52 GMT

My siblings and I also had a bad experience with Allianz. When my father died in 2002 and we tried to cash in his annuities we got stall tactics until we hired a lawyer to send a letter to the company. Even though my Dad had a trust the company said that before they would release the funds we would need to go through probate. My Dad owned 3 annuities each with myself and my brother and sister as a co-owners on each one. When the company finally agreed to release the funds there was a significant difference in the face value and what we finally recieved. The attorney advised us to go ahead and settle so that we would at least get something. In hindsight, I was sorry that we took his advice.

Investigation uses hidden cameras -- and Aunt Alice

Louise, Florida — Mon, 14 Apr 2008 02:34:52 GMT

I and 2 of my friends went to one of those seminars and was mislead into thinking that we would not lose any of our principal. We all believed in the agent who lead us down a primrose path. None of us knew that we were going to be locked in for 10 years. We were never told that. We are all seniors up to the age of 75. Both of my friends have lost thousands of dollars so far. I myself told this agent that I knew of another agent that was taken out in handcuffs after his client lost lots of money due to his fraudulent advice and that the Insurance company settled with the client. I guess that must have worked to my advantage as he did not put me in anything risky as he did for my two friends. He just put me into a money market and never contacted me after that. I would like to know if there is anything that I can do about the 10 yr. annuity that he put me in without my consent.

Investigation uses hidden cameras -- and Aunt Alice

Vincent Oliver, Grand Bay, AL. — Mon, 14 Apr 2008 02:44:45 GMT

Very good report on those Indexed-Annuity scam artist preying on the elderly or anybody of any age. However, I can't help but think, how many of the elderly, when younger, did simular things to others. But, that's probably a different show: "What Goes Around, Comes Around". I am not saying that all victims previously victimized others, because that simply isn't true. Tragically, values are taught to children observing their parents actions and adopting the same attitutes toward society for financial gain: anything goes. For a Christian society that we voice to be, we are really coming up short. Talk is cheap.
I really wanted to tell you that your comment on closing a CD is wrong. I closed my CD and the bank kept all of the interest and some of my capital. I, like you, thought the same thing, that the only penalty is on the interest for early withdraw.

Investigation uses hidden cameras -- and Aunt Alice

Mike Boston, MA — Mon, 14 Apr 2008 02:49:52 GMT

I have worked in financial services for many years and watched your piece this evening with great interest. It is a shame that many individuals prey on Seniors in this fashion but I think a balanced arguement while bad for ratings is important. Many Planners with the proper credentials (Series 6,7, 66 etc.) use annuities as part of a whole financial plan. In that context they are an invaluable tool for risk adverse investors due to the guarantees and income options they provide. However the FIA cowboys led by large national marketing organizations such as Tyrone Clark's do the industry a disservice. I hope these products will at some point be properly regulated by FINRA in order to see that the sale of them is conducted by trained people. Simply possessing an insurance license does not make you a planner. Unfortunately the larger disservice done to the public has occurred because the different state department of insurances cannot arrive at uniform practices and have not allowed a national governing body such as FINRA to regulate sales practices of index annuities. The bottom line is that to properly sell an index annuity you must explain the underlying index and that should require a Securities License.

Investigation uses hidden cameras -- and Aunt Alice

ashley, madison,wisconsin — Mon, 14 Apr 2008 02:57:08 GMT

I was also mislead into taking an annuity when I rolled over an old 401k into an ira. I intially was very happy with the plan and referred the agent to my friends and family and they all trusted the agent and the company. To be blunt the company is World Financial Group. Ironically all 6 of the people I referred were all given the exact same indexed annuity and not one of us were told of the 8 year surrender fees that staggered on each deposit made. They claim that it wasnt mentioned because none of us expressed that we may need to take the money out. Well obviously none of us intended to touch our retirement accounts, but unfortunetly 2 of us needed the money and lost a lot by their unfair and scandalous practices.

Investigation uses hidden cameras -- and Aunt Alice

Steven, Marietta, Georgia — Mon, 14 Apr 2008 02:58:35 GMT

Chris Hansen For President!!!

Chris: Let me begin by stating that I am a huge fan. Its great to see a journalist "wielding the pen for good," (or, in your case, the hidden camera) so to speak, rather than mereley passively telling we lemmings what the news is.

As a native of and member of the Bar of the State of Alabama, I found it interesting that you chose it as one of your bases of operation in this piece. However, as an individual with some knowledge of the somewhat sad jurisprudential history of the State, I would point out a couple of inconvenient facts that escaped your dragnet:

For decades, Alabama had a strong and powerful paintiff's bar which protected and, indeed, frightened off, deceptive predators such as the ones depicted in your story (and the companies for which they worked) with the threat of hefty awards of punitive damages after trials before juries. However, if you'll check the more modern record, you'll find that due in part to the continued disgrace of partisan political elections of judges in the State, certain factions have hijacked the bench in Alabama (most importantly the Supreme Court), and relegated the protections formerly provided by the plaintiff's bar to the annals of ancient history. To provide an egregious example, if an Alabamian signs or "makes his/her mark" on what is usually a contract of adhesion in Alabama, the citizen is deemed to have read and understood such contract in full, even if he or she is a known illiterate.

Perhaps your next expose' should focus on the not-so-slow erosion of the rights of citizens in this Country to a Justice before a trial by jury in the name of advancing the precious "Global Economy."

Investigation uses hidden cameras -- and Aunt Alice

Barry Morrill, El Segundo, California — Mon, 14 Apr 2008 03:05:04 GMT

This was a fantasic hour. I have 2 co-workers who are trying to sell these type of policies. Thanks for the information to ask the right questions. This hour should be shown not only on NBC but belongs on CNBC also

Investigation uses hidden cameras -- and Aunt Alice

Pragati Kumar, Santa Clara, CA — Mon, 14 Apr 2008 03:11:11 GMT

Granted that using scare tactics is not good. However, pushing strengths of a product and hiding its weaknesses is an age old sales tactics. You can go to best buy and they do the same thing. So I dont see what is the big deal about not telling about penalties if you withdraw your money earlier.

One hour of prime time TV could have been spent better by educating consumers on understanding that sales men are not supposed to communicate negative features of their products. Its consumers responsibility to investigate and understand it. Chris should focus on teaching his audience to fish, rather than to give them a fish.

Suggestion to Chris - Why not do sting operations on more significant personalities such a politicians/CEOs and such. That would be much more interesting and have higher impact, at least in my opinion.

Best
PK, SFO Bay Area

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Brad, Northern Minnesota — Mon, 14 Apr 2008 03:16:49 GMT

Chris,

Kudos to your undercover investigation! I own my own wealth management firm and have been exposed to equity indexed annuities since my 9 years in the industry. Our firm provides a number of wealth management tools and not once have I ever recommended such a pathetic, confusing, and illiquid account such as an equity indexed annuity. A little "common sense" can go a long way and certainly locking up my client's assets for 10-15 years with the potential of loosing up to 20% due to surrender penalties is certainly not going by the "prudent man rule" that our industry abides by. I've come across a number of clients who own such annuities issued by the companies announced (in fact 2 of them received letters from Lori Swanson, MN Attorney General, to get their money back due to a lawsuit with the company that starts with an "A") on your show and when I asked about why they invested their money into the EIA, it was rather apparent the agent totally mislead them on the potential returns and neglected to mention the horrendous surrender penalties. There is never a day that goes by do I come across some individual who was mislead, misinformed, or flat-out lied to about a particular investment they own. I was hoping your show would have detailed more on the compensation given to agents when an EIA is sold - an astounding percantage to say the least. Sure, your show will "stir up the pot" per say and cast a black clowd over our industry for awhile, but there is no doubt in my mind the ethical Advisors will survive! Keep up the good work!

Investigation uses hidden cameras -- and Aunt Alice

Joyce, Lakewood, Ca. — Mon, 14 Apr 2008 03:23:56 GMT

I am a Tax Preparer in So. Calif, and have many clients who are elderly and on a limited, fixed income. I am outraged at the number of them who have been talked into putting their meager life savings in annuities. Often, The salesmen use aggresive and abusive techniqes to make the sale, even though the annuity product is totally inappropriate for the client. I hope you will continue to expose the lies and greed involved.

Investigation uses hidden cameras -- and Aunt Alice

Marilyn Wilson, Cashmere, WA — Mon, 14 Apr 2008 03:39:33 GMT

I just watched your program on salesmen's tactics on annuities and wish I had seen something like it a few years ago because my Mother was a perfect example of an elderly (or not) person being taken advantage of. She had sold her home and was moving into an assisted-living apartment. She was told by a representative at a bank in Seattle that an annuity would be the best place for her money. She was 90 years old!The percent she she would have to pay for a penalty by withdrawing money early was never clearly exp;ained to her or her grandson, a very intelligent structural engineer. who was with her. They were told that she could withdraw 10% per year without penalty and that if it was necessary for her to go to a nursing home, withdrawing from the annuity would not cost any penalty. We found that this was not true when she withdrew $40000 to let a dishonest grandson "borrow" it to be paid back at $50 a month! Fortunately, she had second thoughts and my son was able to stop payment on the check before the grandson cashed it. The bank would have taken a large penalty then and it was then that we discovered that they would not allow her to withdraw witout penalty to pay for assisted living but it had to be a certified nursing home. After many discussions with the bank and reading the fine print we paid the penalty and withdrew all of the money, put it in CD's and savings so her bills could be paid. Banks charge only one quarter's interest as a penalty, certainly much less than what we paid the Seattle bank. Mother lived 6 more years and we were able to pay the costs from the money which had been in the annuity. She never did have to go to a nursing home and was certainly much happier in a smaller assisted living home with caring people who had the time to take good care of her.

Investigation uses hidden cameras -- and Aunt Alice

Bill Nachenberg, Los Angeles, CA — Mon, 14 Apr 2008 03:46:33 GMT

I purchased an indexed TSA and like many other seniors trusted the person who sold it to me. After seeing the special on insurance scams to seniors I decide to check my policy. My surrender penalty starts and 20% the first year and goes down 1% each year for 16 years. I also realized that my Maturity Date is 2056. I am 62 now and must reach my 110th birthday to get any payments. Do I have any recourse?

Investigation uses hidden cameras -- and Aunt Alice

Kathleen Korth, Sparks, NV — Mon, 14 Apr 2008 03:46:57 GMT

This afternoon I rec. our statement for our annuity! We have lost almost 8k and are paying $1700+ for ?. My husband set two of these up for 88k each when I was out of town. Now I see it is costing us a fortune for these. My heart sunk when I watched your show this evening! I really do not know what to do???
Any suggestions? We love your show and the work you do to help good people from bad people. Kathleen Korth

Investigation uses hidden cameras -- and Aunt Alice

DR — Mon, 14 Apr 2008 03:52:03 GMT

Legitimate sellers of annuities, will not only inform a prospect of the need for emergency liquid money, they will complete a fact finder to help determine income needs. By not giving time to a reputable voice of the industry you avoid disclosure as well as some of these agents. The worst part about media that casts legit product with an air of scandal, when it is really a bad agent, is increased fear to those who rely on your objectivity

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Antionette W. Johnson — Mon, 14 Apr 2008 03:53:57 GMT

Mr. Hansen, Case in point and I will make this short: Excerpt from USA Today:"Nightmare on Wall Street!!!8.8 Trillion lost
Had these same people had their funds in Equity Index Annuities from 9/1996-9/2001,not a penny would had been lost. 46% of retirees would not of had to postpone their retirement, due to losses in the Stock Markets. How about doing a program on Bank employees and Stock Brokers selling Stocks and Mutual Funds Investments that are unsuitable for many Seniors!

Investigation uses hidden cameras -- and Aunt Alice

Joe Guarraci Seattle Washington — Mon, 14 Apr 2008 04:08:55 GMT

Dear Chris: Here is a possbile idea for your show. Last year my wife came down with Guillian Barre a terrible auto immune disease. Having schedules another cruise several months in the future I called Holland America to cancel that cruise. They said they will keep my total deposit.
I companined to the Arrorney General of Florida with no luck.
How many other folks are loosing their down payments for various reasons. Thanks You.

Investigation uses hidden cameras -- and Aunt Alice

Geoff, Philadelphia, PA — Mon, 14 Apr 2008 04:09:40 GMT

Dear Chris:

While I think your expose about equity index annuities was both timely and useful, why did you spend an entire hour exposing only one dreadful aspect of these annuities? You devoted the entire show to the issue of surrender charges. There is much more about these investments that should have been exposed: the low returns; the very high commissions (you mentioned this in passing, but never elaborated); and most importantly, the sale of these annuities ARE NOT regulated by the SEC. You had plenty of time on the show to expose these other important adverse attributes. Also, you should have presented someone like John Bogle of Vanguard to discuss why low cost index funds, such as the total stock market index and the total bond index, would outperform EIA's for almost any five year period considered. I think you missed an opportunity to explore ALL of the bad points about these annuities, not just one bad point. Thank you.

Investigation uses hidden cameras -- and Aunt Alice

Gary Rogers,Fort Worth, TX — Mon, 14 Apr 2008 04:13:11 GMT

I enjoyed the show, and I hope it will cause unethical agents to get out of the business. I have been an insurance agent for over five years. I am sure you know that all industries have good and bad people in them and that DOESN’T make the product bad, people do. I do hope you will be the good in you industries and provide both sides of the story. FIA’s (Fixed indexed annuities) are a very good savings vehicle, with guarantees. They can provide lifetime income, market-like gains without the risk. They pass to heirs without probate, etc. FIA have surrender charges, and should be revealed. What investment vehicle can tell you today what you can sell it for in the future?? Annuities!!! Can you call a stock broker and tell him you want to put in money today, sell in five years, what will it be worth?? Yes Annuities have surrender charges, but if five years into the contract someone wants out, I can tell them TODAY what the contract will be worth five years from now based on surrender charges.(Guaranteed)
Annuities are not bad, some people are. Reporters are not bad, just the ones selling rating, not the truth.

Investigation uses hidden cameras -- and Aunt Alice

Elizabeth, CA — Mon, 14 Apr 2008 04:21:13 GMT

Chris,
Journalism should be a description of facts without bias or interpretation. Your story tonight exposed the drawbacks of annuities, without presenting any of the benefits. Doesn't one-sided journalism simply perpetuate the misunderstanding and fear that most Americans have towards financial products?
If your aim is to educate America so that each individual can make the best decision possible for their circumstance, it would be beneficial to fully educate them.

Investigation uses hidden cameras -- and Aunt Alice

David, Oxnard, CA — Mon, 14 Apr 2008 04:22:24 GMT

A few things I'd like to comment about:
1) I didn't hear anyone say HOW and WHY a senior can't lose money. It's backed by the "claims paying ability of the insurer". I kept waiting to hear that from SOMEONE when talking about the guarantees, but no one said it. I think it's a very important disclosure. Annuities are not guaranteed by any bank or government entity.

2) The problem isn't their credentials, it's what they're doing with them. They are touting themselves as people who are bigger and better than they really are. It's a manipulation tactic to get people to trust them. The fact is, is that many products are great by themselves. If an agent needs to "puff themselves up", it shows that they don't really believe in their product and their ability to give quality counsel and advice to the clients they serve.

3) I noticed that each one seemed to have a SINGULAR agenda - to sell 1 product. I didn't see any fact-finding going on. No questioning about someone's total financial picture to see if such a product would be appropriate given a person's level of savings, life expectancy, etc.

4) Annuity Surrender Charges. Some of the annuities that were discussed had NO liquidity provisions. Many quality annuities generally have up to 10% of your principle available without a surrender charge. However, I've never been a big fan of the EIAs because of the size of the surrender charges, and the length of time for the surrender period. From what I can gather, these exist SOLELY to pay the advisor a very large commission and to compensate the insurer to help them earn a greater profit on the sales and contract maintenance of these annuities - larger than other kinds of annuities.

5) The difference between MARKET risk and LIQUIDITY risk. You see, you can't lose your principle due to market risk in an EIA. But, you CAN lose money due to surrender charges because of lack of planning for emergencies. No one should ever recommend that you put every single penny into any product.

So, not every insurance agent is out to "get you". But they should be more forthcoming in all the terms and conditions of the products they sell.

And here's a hint for those who don't: You will get more respect, less complaints, and more client referrals for being much more upfront about how your products work. You may want to consider changing your ways. You'll sleep better at night.

Investigation uses hidden cameras -- and Aunt Alice

roy reese, San Diego, CA — Mon, 14 Apr 2008 04:28:10 GMT

I have been a registered financial advisor for 15 years and have sold fixed annuities; and variable annuity. In those 15 yeears I have never sold a equity index annuity. The Dateline story did a great job of showing the deceptive sales tactics of some agents. The biggest deceptions was in the surrender charges; if a senior would have to get the money out early for some unexpected reason. The period of penalty were to long and percentage were much to high in most of these annuity being sold that was reveal by dateline. There are annuity that are great for senoir if proper fact finding is done and proper disclosure of the product features are revealed to the client. Dateline should run another story about the agents and advisors who are doing things the right way; because there are two sides to every story and in this case only the bad part was brought out by Dateline.

Investigation uses hidden cameras -- and Aunt Alice

Carol Walldau, Bonanza, OR — Mon, 14 Apr 2008 04:57:15 GMT

Dear Chris:

I watched your program this evening on Annuities. I am 58 years old, widowed, and I am permanently disabled with Fibromyalgia. I purchased an Annuity in January 2008 without really knowing that much about it. After watching Dateline, I went to my file cabinet and pulled out the "Annuity file". I had no idea that my Annuity will start paying in 2021. That's 13 years from now! I will be 71 yrs. old. The agents (2 of them) never told me this. I have a small amount of money in liquid assets, but if my car dies on me, or whatever, I'm in big trouble about the terrible penalties involved in retrieving my money. Are there any recourses out there for me? I really need to cancel this annuity and put it in a short-term CD or something. I am scared to death about this; I have a lot of years ahead for me and I am at a stand-still over this. Please help me if you can to get my money back. Thank you very much, Chris. Carol Walldau

Investigation uses hidden cameras -- and Aunt Alice

Mark J Colbert — Mon, 14 Apr 2008 04:57:55 GMT

Hey Chris, great job!!
It was a real pleasure watching you do the same thing I've done for 15 years. As one of the better-known Life Insurance Fraud Investigators in the United States, I've done dozens of "sit-ins" and witnessed the way in which different agents peddle their goods. I am proud that, as a result of my investigations, more than a dozen agents have had their licenses to sell insurance permanently revoked. I am currently working on a case that could potentially involve 70,000 teachers in California. 403(b) fraud against teachers in the U.S. is a huge scandal and the misrepresentation of equity index annuities are a big part of it. I think it feels great to help people who are being treated unfairly by insurance agents. Welcome to my little part of the world.

Investigation uses hidden cameras -- and Aunt Alice

Gordon Bell Medford OR and San Jose CA — Mon, 14 Apr 2008 05:07:15 GMT

I authored a book titled "Tell "Em"That's MY Money You're Messing With!" in which I suggest that legislators make everyone dealing with retirement funds be charged with legal fiduciary responsibility!

That's unlikely to happen due to our constitution.

This fast growing national concern is due to an immorality that can be significantly alleviated through education ...thus I'm making a local for now grassroots appeal for people to help themselves by listening to an expert reveal the absolute truth and subsequently asking that they help spread the word.

There is a right way to serve our seniors and a wrong one. And believe it or not there are some Equity Index Annuities without severe penalties as revealed on your report. And, ever so more important is the STRUCTURING of annuities versus buying them in isolation. The insurance companies do not want you to know how to use them in your best interest, they want you to follow their structuring. So, If you don't know how and when to use them they are useless and even detrimental. Used correctly however,they actually do provide unique peace of mind.

The history of the Equity Index Annuity would amaze you. Its essential functions were designed for the wealthy elite and used successfully for decades. One pioneering insurance company tested it as an annuity product and it was so successful so the others copied the system in various forms. Unfortunately, like anything else there are some very good products and many more real duds. It is Buyer Beware in America for everything especially annuities!

So, I devised a method to make them available with some careful consumer steps.

I charge a fee to create a well devised plan that prepares for every scenario. I typically recommend an Equity Index Annuity ONLY for money that is not going to be needed; however, if that emergency did arrive, 94% is immediately liquid without a penalty. It also has some other very fair provisions.

The client is free to go to anyone they want to make their purchase. If they go to an agent with whom I have established a relationship, their fees are waived because they donate funds to me so I can continue to inform the public.

The other issues that are perhaps even more disconcerting are the fiduciary issues with 401k's. I am an Accredited Investment Fiduciary Auditor TM not a "phony" designation, as it is taught by the Center for Fiduciary Studies in conjunction with the University of Pittsburgh. One actuary recently stated that the average 35 year old in a 401k stands to miss out on more the $450,000 over the next 30 years due to fiduciary shortfalls. ERISA does not have the ability to audit every plan so it's estimated that over 94% have serious shortfalls.

Oh, I happened to purchase the Financial Playbook Magazine marketing program BUT I wrote my own article and everyone knows it is published regionally so the same cover in another area has an other adviser on its cover.

That's I believe fair marketing; however, ONLY when books and articles are in fact authored by the person named as the author.

I was not happy to learn that agents do not write their own articles for their issues.

Please feel free to contact me. If my email address is not shown just look up my book available through bookstores everywhere.

Investigation uses hidden cameras -- and Aunt Alice

terry, North Vancouver, B.C., Canada — Mon, 14 Apr 2008 05:38:17 GMT

Your reaching with your annuity story, Mr. Hanson. (NOTE: I'M NOT IN THE INSURANCE OR INVESTMENT BUSINESS) First off, they are legal to sell and secondly, let the buyer beware. And what about the information you put out? You mentioned Allianz is headquartered in Minneapolis. Maybe in the U.S., but it's a German based insurance company. That was one of several glaring and misleading assertions you made.
One could go to a used car lot and find bigger rip-off salesmen or spend a day at an advertising agency who sell lottery tickets. They deceive the public everyday by telling them they have a chance to hit it big! Is it a lie? No, but they're selling a fantasy product to over 95 per cent of their clients.
Like I said, you're reaching...

Investigation uses hidden cameras -- and Aunt Alice

Van Blanton — Mon, 14 Apr 2008 06:15:22 GMT

Watching the show, a question came to mind, that made me think and feel bad for some of the participants. 1. These insurance people were called to come in and present an annuity. 2. We didn't see any profile or risk tolerance views, or what the goals of the clients were. 3. Comparing an investment or annuity with a savings account/cd fdic account? Gee whiz you put people in a spot where their job is to sell and hang them out to dry, I think people make mistakes, or even if they feel they are doing something right they are doing there best. I am not saying these folks are saints, but my wife asked if buying a car and then changing your mind later and dealing with the repercussions was the same? Well, I guess its kind of the same? No? It seems that some of these folks may not be clear on the purchase and maybe not as easy to comprehend as a car transaction, but I feel these people are buying an investment, with no plans on taking money right? I think the interviews walked a fine line, that really portrayed things one way. I am a highly educated individual and what's more alarming is the economy and the fall of every state are the subprime mortgages that people did not understand. So what's worse? bad economy and losing your house because of poor mortgage officers or someone seeking out alternative investments and having buyers remorse? I don't know about these segments, as if people start to get scared of any and all investments, inflation will be more cruel at the end of retirement. People that don't save will drain our social security and will cause people to retire at 75 rather than 65, do we all really want to work that long? I can tell you this much if you do not invest money for the long term, you will be working at the local walmart as a greeter. Look around its already happening. I feel this is a mistake, we should be learning the pit falls of poor mortgages, and teaching the public to save and not spend money.

Investigation uses hidden cameras -- and Aunt Alice

Todd VanDenburg, Santa Rosa, CA — Mon, 14 Apr 2008 06:31:11 GMT

I couldn't agree more that these types of high-commission products are far too often being over sold to retirees! Whether it is an annuity, a mutual fund, a reverse mortgage, etc, I believe that any financial product that limits a retirees access to their hard earned money should be strictly regulated/controlled. Is this going to happen any time soon? Probably not...

In the absence of additional oversight, why can't we all just agree that, when selling these types of products to retirees, we will let the investment company, insurance company, etc allow the client to walk away without penalty (should they need their money for ANY reason) and, if necessary, we will return any commission that we earned on that sale??

If the commission is taken back from the rep, maybe there will be fewer cases of retirees being penalized for accessing their money just when they need it the most...

Investigation uses hidden cameras -- and Aunt Alice

Ewald Munczenski, Panama City, FL — Mon, 14 Apr 2008 07:49:15 GMT

Hello Mr. Hansen:

Let me begin by saying that your efforts to protect the consumers that are the most likely to fall prey to the worst members of what happens to be my profession are welcomed by myself and the agents that work with me.

As the Owner and President of a small but well respected Insurance Agency here in Panama City, Florida, I am hopefull that I will be able to explain to you why I fully expect to have our telephones ringing off the hook first thing Monday morning.

The agency I own was started by my uncle 40 years ago. I was fortunate enough to have the opportunity to learn "The Business" from him beginning in 1991. My Uncle passed away 9 years later. His Wife, my Aunt, fearlessly assumed the role of Owner and President of this small Independent Insurance Agency.

At that time , my Aunt was enjoying her time as a retired school teacher. Which deserves so much more admiration than that of an Independent Insurance Agency owner.

She made it possible for myself and my fellow agents to continue to provide the same service that my Uncle not only built his agency on, but instilled in every single honest, respected independent insurance agent that was fortunate to work for him.

Several years later, My Aunt, Doris Featherstone, gave myself and my two partners the opportunity to keep this little agency open and at the same time, she gave our clients' all 9,546 of them, the piece of mind that they had come to rely upon.

That being said, I feel that i would be remiss, if I did not express to you my deep convictions regarding the principals that I beleive, the majority of my fellow Licsened Life and Health Insurance Agents possess.

In my opinion, you and your organization have a great respomsiblity to each and every person who purchased an Equity Indexed Annuity, that was informed about every single feature of this paticular type of Annuity, to include, but certainly not limited to the surrender charges, which seemed to be the " smoking gun" in most of the hidden camera segments that were presented by your program.

My biggest fear is that the potential millions of consumers, that were properly presented with this paticular type of annuity, who were well suited for and have enjoyed the benefits that this paticular type of annuity have provided, feel like they have been mislead, when this was not the case.

Please consider this fact and act accordingly. The way that this story was presented may prompt some people to surrender certain annuities that may have been properly presented to people who have previously and continue to benefit from the features of these products that have been approved for sale in " to the best of my knowledge" most each and every state .

I applaude Allianz Insurance Company of North America for their effoerts to not only protect their unsuitable clients, but for the job they are doing reassuring the well suited clients who have enjoyed the benefits of these paticular policies.

The type of reporting that you have become so well respected, admired and revered for has protected and saved more lives than anyone can ever imagine.

Please consider the ramifications to not only the professional likcensed insurance agents, but also the elderly consumers that have purchased and enjoyed the benefits that these type of annuities can provide.

I would like to thank you in advance for any assistance you have and will continue to provide for the Senior Members of our society.

Respectfully,

Ewald S. Munczenski, President
Jack Featherstone Agency, Inc.
1815 West 15th Street, # 1
Panama City, FL 32401
850-785-1213

Investigation uses hidden cameras -- and Aunt Alice

Guy Brickman, Miami, Fl — Mon, 14 Apr 2008 10:50:18 GMT

Outstanding program. Exposing these snakeoil sales people is most important. As an insurance agent and Financial Planner for 42 years you will alway have 5% of any business that are bad, that goes for Insurance, doctors, lawyers, news people and politicians. Guy Brickman, CLU, ChFC, CASL, CFP

Investigation uses hidden cameras -- and Aunt Alice

Tom, North Dakota — Mon, 14 Apr 2008 11:02:07 GMT

I keep reading on this blog how the media slants the truth, good and bad people, responsible agents. It looks to me that these people do nothing to clean up the so called bad agents that work within their industry, but rather are helpless about the situation and prefer to complain about how they are being victimized by the media. The truth is that there are people getting ripped off and they do suffer, and the only way to address the situation is by what Dataline has done. Now lets try to figure out how to indentify the good from the bad.

Investigation uses hidden cameras -- and Aunt Alice

Robert Whitlach, Port St Lucie, FL — Mon, 14 Apr 2008 12:28:07 GMT

The biggest issue I have about this report is that it didn't spend 5 minutes on telling folks about the merits of annuities, especially the ones that are sold using the correct suitability and disclosure processes. I only hope that it didn't scare seniors that already have an annuity that is past its surrender period and suitable for their investment needs to run out and change becuase they are now scared their product is bad. That situation is just as bad as selling them the wrong investment.

Investigation uses hidden cameras -- and Aunt Alice

steve morrison , glenolden, pa. — Mon, 14 Apr 2008 12:34:36 GMT

Chris,
Do you think a fixed index annuity is a good choice for a 401k rollover? I am not concerned with the surrender charges, just want your opinion.

Investigation uses hidden cameras -- and Aunt Alice

RH, Jacksonville FL — Mon, 14 Apr 2008 12:50:42 GMT

Chris,
Thank you for exposing these scam artists. As you can see by the above comments, most of these salesmen have "drank the Koolaide." These people have convinced themselves they are "doing right" by the client by selling these puffed up products. They actually believe in their head they are helping people. The only people they are helping is themselves.

What you did not mention in the episode last night is the amount of commission that goes to the rep for selling this product. Some can be as high as 10% to the rep. That is $10,000 of a $100,000 investment. The motivation is there to sell these products. The solution is more shows like yours and regulate the commissions to 1%. If the commissions were the same as other investments, reps would snap out of it and actually do the right thing by the client.

I hope to see more of these shows in the future.

Investigation uses hidden cameras -- and Aunt Alice

Joel Franklin, CPA, Longview, TX — Mon, 14 Apr 2008 13:07:37 GMT

I noticed you edited out that all the EIA that were presented have a 10% first year bonus and also that none of the "high commissions" come out the client's money. I have been selling annuities since 1987 in Longview, TX and they are a great product for the right situation. Also, you edited out the part where the agents explained waiver of surrender charges on death, nursing & home health care, and terminal illness. You also failed to mention that most brokerage firms charge their clients a 1% or more wrap fee on their whole account every and that comes out of their money. The person who only had $40,000 total life savings should not been in an annuity. I agree, agents should make full disclosure and not represent themselves as anything but insurance salesmen.

Investigation uses hidden cameras -- and Aunt Alice

jim lee mandeville, louisiana — Mon, 14 Apr 2008 13:10:19 GMT

I am a RIA and use Fixed Indexed Annuities. There is no problem with this vehicle when used properly and full disclosure is made. The problem is dishonest people which you pointed out, however; you are remiss in pointing out positive aspects of this product. Annuities serve a very useful function in the financial world and inspite of your negative report they will continue to do so.It would really be fair and unbiased to report both sides of the story. Afterall when you withhold information from the consumer are you any better than the guy you portrayed in your episode?

Investigation uses hidden cameras -- and Aunt Alice

Phillip J Cannella III, Valley Forge, PA — Mon, 14 Apr 2008 13:17:06 GMT

As a licensed insurance professional who has written over $100 million of index annuity premium over my career, I would like to formally invite Chris Hanson to interview me or any of my advisors. If Dateline is interested in presenting a balanced view of this industry, he'll take me up on it. We are committed to ethical business practices, and have nothing to fear from media scrutiny.

I would also like to add my voice to the chorus of support for the ethical agents out there promoting "the good" equity index annuities. These financial vehicles offer upside growth with no downside market risk, as well as favorable tax treatment, avoidance of probate, provisions for emergency withdrawal, and many more benefits. Yes, there can be surrender penalties, but they can be managed in all cases and avoided in most. If consumers are presented with "the good, the bad, and the small print," most make the informed decision to protect their nest eggs from market volatility with guaranteed safe accounts from the insurance industry.

Full disclosure of all contract terms is required by state law, of course, and all ethical agents follow that to the letter. In the interest of good journalism, I urge Dateline to contact my office to get the part of the story that it seems to have ignored.

Investigation uses hidden cameras -- and Aunt Alice

Wilbur LaBar, Manistique, MI — Mon, 14 Apr 2008 13:30:57 GMT

We have experienced a similar problem with an Annuity provider. Where can I obtain a list of those insurance companies that are under investigation? Thank you.

Investigation uses hidden cameras -- and Aunt Alice

Jean Hash — Mon, 14 Apr 2008 13:32:18 GMT

Dear Chris,

Great Job, you need to come to Florida and save the seniors. They are being taken for a royal financial ride by the insurance agents. Not only are they being sold annuities, at the same time the dear friendly agents sale them promissory notes and property investments. Of course we know what the insurance agents do with the seniors money that is invested in property and promissory notes. The money is given to the agent and not the insurance companys. That's right, they spend it on their billionaire life style.

What the insurance sales agents do not tell the seniors when they sale them a 10% bonus index annuities; it is not a take your investment plus earnings and walk away after 10 years. That means it matures after 10 years, but they can not take their money out of the annuities. If they do, they will lose the 10% bonus plus some of the index earning. It happen to my parents. The bonus was to help pay the surrender charge on an annuity they already owned. The new bonus index annuity was surpose to be better than the fixed annuity they were transferring the money from. It is a 20 year annuity. After 10 years if you do not take a 10 year pay out than you lose most of the earnings. Most senior don't know they purchased a 20 year annuity becaise the sales agents do not tell them.

The State Insurance Commissioners really needs to take a good look at the agents and were the peoples money is invested at the time the agent sales the annuities. Most funds are being transferred from fixed annuities to another fixed annuites just for commissions. The big insurance companies know they are transferring the elderly peoples funds out of an annuity from other insurance company to sales their annuities.

Investigation uses hidden cameras -- and Aunt Alice

Danny McDuffie — Mon, 14 Apr 2008 13:37:03 GMT

Hi! Chris
Your report on EIA annuities was true of some sales people. I personally own EIA Annuities and have been pleased with its return over the last 3 years I was 55 when purchased.. The product you need to look into is variable annuities sold by Brokers. In this product you not only have to pay fees for getting out of the product but your tied into the market as it goes up/down and your only option when going down is take the loss or baleout.

Investigation uses hidden cameras -- and Aunt Alice

Randy, Raleigh, NC — Mon, 14 Apr 2008 13:42:46 GMT

Chris,
Typical reporting. There was as much information missing as there was related. There was constant reminders of "tying up your money for years" but little reference to "income for life", which, by the way, only annuities can offer.

You never related information concerning the best annuities that will allow access up to 20% (if you didn't take the 10% the year before) up to 75% access to the money in case of a nursing home or 100% back in case of terminal illness. You were only concerned with surrender fees. Any agent worth their salt will do a complete fact finding (the agents you intereviewed did not) prior to allowing any of their clients to put money into any type of annuity or any type of investment and the proper diversification. I find only stock brokers will advise their clients to put all their eggs in one basket.

I did like the exposing of agents writing "ghost" books and articles. That's true deception and should be outlawed.

I'm sorry the people you interviewed were mislead, but it wasn't the product that mislead them, it was the agent. I'm sorry the man lost his home, but I doubt it was due to $6,000 in surrender fees. More than likely it was due to his wife's medical condition and its costs.

Although you advertised an expose for "tricks of the trade" purportedly exposing misleading sales tactics and agents you spent as much air time demeaning Index Annuities as you did on the advertised subject. A great injustice for a product, that when sold in the right circumstance and with the proper diversification, is an outstanding financial vehicle.

Investigation uses hidden cameras -- and Aunt Alice

Chris, Knoxville, TN — Mon, 14 Apr 2008 13:50:41 GMT

Thank you for treating the practice of selling insurance the same way you would child molestation. It seems you only focused on the bad and yes there are a lot of unethical agents who need to be stopped, but you were not biased on the story. You never showed the benefits of annuities. You have scared a lot of seniors. The same way the unethical agents scare them. Annuities avoid probate and create an immediate estate. You should never have more than 20% of your saving in an annuity. You know if you withdrawal from a CD, after the penalty, you could end up with less than what you started with. Annuities do a lot of good for people. I don't like the EIA either but there are a lot of good ones and you should have mentioned that.

Investigation uses hidden cameras -- and Aunt Alice

Bryan, Troy, MI — Mon, 14 Apr 2008 13:51:00 GMT

Mr. Hansen:
You should come back to your old stomping grounds in the Detroit area - there are a few companies here that are taking advantage of local seniors.
They start out by buying phone lists and cold calling senior citizens. The script is to tell the senior that they sent in a card to "Estate Services" for free information and that they would like to send out a representative to drop off the free and valuable information. If an appointment is set, a representative of "Estate Services" comes by to give an hour presentation on Living Trusts. More often than not, the representative is not even a lawyer, but the Living Trust is prepared by a "Straw" law firm. If the senior buys a Living Trust, on delivery, the sales representative brings with him a "financial expert" (Annuity salesman)to "fund the trust". Because he is there under the guise of "funding the trust" the seniors tend to trust them and often buy inappropriate annuities, even EIA's. The main financial advisor also says he has a book that he wrote though all he did was pay $5,000, write his bio and dedication. He often uses scare tactics and bullies seniors into feeling that if they do not buy what he suf=ggests, they are not properly "funding their trust" and will not be protected. They even call these annuities "trust funds". They also use Medicaid scare tactics and are getting into reverse mortgages.
These companies operate out of a building on Maple Road in Troy - you should really investigate them thoroughly.

Investigation uses hidden cameras -- and Aunt Alice

Harry Albany, N.Y. — Mon, 14 Apr 2008 13:55:26 GMT

Mr Hansen, Sunday's program on insurance scam's was very informative. I would like to see a program on Lawyer's who take a vantage of people,there are some very good and honest Lawyer's however there are way too many dishonest ones that give the good ones a bad name. Thankyou

Investigation uses hidden cameras -- and Aunt Alice

Debbie Borowski, Tallahassee Fl. — Mon, 14 Apr 2008 14:08:18 GMT

Chris,
My father was taken advantage of by an unscrupulous bank associates selling annuties to seniors.Employee was terminated and my father in his seventies and onset of Alzheimers has hit a brick wall on trying to recoup or get out of it. Is there someone in the state of Pa that can assist or can be contacted in reqards to this matter. I am an insurance agent in the state of Fl. and would not do what these people have done, but my hands are tied to assist.

Investigation uses hidden cameras -- and Aunt Alice

Jacqueline and Thomas Bogashewicz — Mon, 14 Apr 2008 14:09:35 GMT

Dear Chris,
My husband and I just purcased an indexed annuity from Amerilife agency in the Port Richey area. The funds were originally in a Florida Retirement System, and was retirement money for the future. We are both 67 yrs. old, and this money is practically all we havee. Were stuck with 17 years and penalties appox. 20% if we need to withdraw for any reason. Is there any informtion about Amerilife lawsuits, and what protection do we have?? What an eye opener the show was, too bad we didn't see it sooner. In act, I got the policy out when I recognized the folder from Ameriquest, and I tried to read the policy as you were asking the same questions that we had wondered about. Great work, help if you can. Thanks again, Jackie and Tom Bogashewicz

Investigation uses hidden cameras -- and Aunt Alice

laura b kratochvill, Seneca, SC — Mon, 14 Apr 2008 14:11:17 GMT

My mother and father trusted a long-time "friend" to sell annuities to them. Ron Johnson,who touts himself aa a financial person (all he really does is sell annuites)in Mesa, AZ, sold my mother a $40,000 annuity while my father was dying. He told her it was a wise investment. My father died ~ 3 weeks later - never knowing what she had bought. That was in May 2006. My mother passed in February 2008 and her $40,000 investment is worth a little over $39,000 at this time. This was probably the most egregious of all the investments he sold my mother and father. She was 78 when she purchased the annuity through Standard Life of Indiana.

Investigation uses hidden cameras -- and Aunt Alice

Phil Leech Spring Lake, MI — Mon, 14 Apr 2008 14:15:58 GMT

Chris,
I watched with interest your show last night regarding
some unscrupolous insurance agents selling unsuitable
annuity products to unsusepecting seniors.
You also spent considerable time interviewing Minnesota Attorney General Lori Swanson.
I have had a securities license and a life and health
insurance license for a number of years. Now that I am a"senior" myself I have become more interested in annuity products than previously.

I have one possible solution to the "scamming" of seniors regarding annuity products. For a number of years the mutual fund industry has been regulated through the Investment Company Act of 1940. One regulation states that MAXIMUM sales charge/load
that a fund can charge. Further, competition has
helped to keep these costs down.
Perhaps the NAIC (National Association of Insurance
Commissioners) might adopt a Model Law, as they have done with other products, for the states to adopt
regarding limits to maximum surrender charges and the time necessary to be fully vested in the annuity product.
Insurance companies, and their sales agents, who offer products with 20% initial surrender charges
and 15-20 before they become they become fully vested
is a disgrace to then industry. Only education and
regretably state intevention is the only solution.

Investigation uses hidden cameras -- and Aunt Alice

John W Whitlow — Mon, 14 Apr 2008 14:16:12 GMT

I am a huge fan Of Dateline. However, a very poor job was done on your April 13, 2008 show. I am an insurance agent and I do sell Equity Indexed Annuities through Allianz. The products offered by Allianz are excellent products and a perfect fit for many senior citizens. The final comment aired last night by a senior citizen saying, "don't buy these products", is a sad note to end the show. Equity Indexed Annuities are a perfect investment for those seniors who do not need to get to all there money. I completely understand that many agents are only interested in commissions and do not always use ethical sales methods but this is true in any business including TV reporters. Dateline is the best but try to remember that not everyone is a scam artist.

Investigation uses hidden cameras -- and Aunt Alice

Bob Dee — Mon, 14 Apr 2008 14:18:55 GMT

Chris: Yes there are agents that should be held accountable for failing to disclose all information and by using bogus designations. There ARE designations that are legit. Also, the bogus magazine articles have no place either.

However, fixed and indexed annuities are very appropriate vehicles for seniors in many situations. No one should ever put all their eggs in one basket. A person should should always maintain an emergency cash position. I have yet to see an investment or insurance product perform for the client if the account needs to be regularly accessed beyond penalty-free withdrawal amounts. Tax deferral and compounding works best over time. Hence, surrender charges...which should and must be disclosed by the agent. For years Stockbrokers have been selling variable annuities which unlike indexed annuities, subject the capital to risk of loss. They are also high in fees, have surrender penalties and clients cannot get out of them many times without substantial loss. In my opinion, these are investment vehicles that should not be recommended to anyone over the age of 45.

Fixed and indexed annuities are terrific cash accumulation and cash distribution vehicles that absolutely are suitable for many people, seniors and otherwise. Your investigation, while focusing on disclosure of surrender penalties for withdrawal beyond the penalty-free amount was not balanced. You should also have a professional planner show your audience the best uses of these products that provide income one cn never outlive and potentiall protect one's nest egg from medicaid spendown and the claims of creditors and preditors. In my opinion, you did more harm than good by not showing a balance.

Investigation uses hidden cameras -- and Aunt Alice

Greg Hansen, Green bay,WI — Mon, 14 Apr 2008 14:21:59 GMT

Chris,
I am a Financial Advisor with a legitimate Sec regulated firm. I think your program was great on Indexed annuities. It would be helpful to have a follow up on an important point we missed here. ThaT is how they work and what the risks are in using them for income..First, They do show at least the amt invested, net of any withdrawals..What they fail to properly explain is that they typicaly keep 30% of the S$P returns ..That means if they have 100k invested and the S$P earn 10% or 10k on 100k, the ins company keeps 30% or 3k..That is 3% commission..Most Inde3xed annuities pay 10% to the agent..ouch..where do they , the consumer think that comes from..To make matters worse...if the client took out the 10% to live on, i t would,thus, be impossible to regain the withdrawal and the statement would read 97k..So while I think the story was great..There is much more than meets the eye..It could get worse.. Greg in Wisconsin

Investigation uses hidden cameras -- and Aunt Alice

P.K. FLORIDA — Mon, 14 Apr 2008 14:25:46 GMT

I purchased a Variable Annuity from AXA approximately 4 years ago. They did not explain surrender charges or even what the yearly costs of the plan were to me.Is it possible to roll this type of plan over to something else without it costing?

Investigation uses hidden cameras -- and Aunt Alice

Neil Hendershot (Harrisburg, PA) — Mon, 14 Apr 2008 14:26:50 GMT

Chris Hanson, please read the Update to my posting, dated April 11, 2008, on the PA Elder, Estate & Fiduciary Law Blog (http://paelderestatefiduciary.blogspot.com) about your program. Then you will understand why the one interviewed agent knew about your investigation when you revealed your identity.

Investigation uses hidden cameras -- and Aunt Alice

Ed, Massachusetts — Mon, 14 Apr 2008 14:45:28 GMT

Mr. Hansen,
It is typical of "Scare Journalism" to only present one side of the story. It was extremely irresponsible of you not to present the positive side of the FIA products that are being sold to seniors. These products offer tax deferral, are probate free, have no surrender charges on death, nursing home or terminal illness, offer penalty free withdrawals, growth that can exceed CD's and similar safe money vehicles and offer long term safety. It has been my experience in my 15 years of working in the Insurance Industry that there are more good agents out there than bad ones. There agents who care about there clients and have been trusted advisors for many, many years. Like any service industry, the insurance companies offer products that the consumer can purchase or choose not to purchase. Every industry has their “Bad Apples” and the insurance industry is not immune to it. For every bad contractor, doctor or car sales person there are hundreds that have served their customers well. Your type of “journalism” also preys on seniors by keeping them misinformed.

Investigation uses hidden cameras -- and Aunt Alice

J Davis, Birmingham, AL — Mon, 14 Apr 2008 14:46:02 GMT

I am a Financial Advisor and former banker - SVP over lending. I am glad to see the truth come out about equity index annuities. They are bad. However, the attorney general of Minnesota misspoke when discussing penalties on EIAs as compared to CD penalties. If you put $100,000 in a five year CD and request the money back 1 week later. You will not get the entire $100,000 back. That's why it is called a penalty! The maximum CD penalty is 6 months interest. If you have accured 6 months interest, the remainder comes out of your principal.

Investigation uses hidden cameras -- and Aunt Alice

Rich W,, Philadelphia, PA — Mon, 14 Apr 2008 14:49:45 GMT

Good points were raised about the distribution of annuities. However, only one distribution network was explored. Chris really missed the mark because BANKS are a huge distribution channel for these things. In the story, the independent agents were invited into the senior's houses. The bank sales technique is much more subtle. You don't even know you're leaving the bank and walking into a stock broker's office...

Investigation uses hidden cameras -- and Aunt Alice

KM, Hampstead, NC — Mon, 14 Apr 2008 14:50:03 GMT

As an insurance agent who sells annuities to seniors under strict compliance guidelines, I would like to know when the follow up to this program will be aired? Meaning, I go to work everyday, with the senior populations best interest in mind and truly beleive that fixed annuities are a blessing to some people. Suitablity is key here! As I understand your purpose is to "get the word out" to seniors whom this product might not be good for...there are people out there that this product may be able to help as well. As I said before....when will the follow up to the positive side to fixed annuities be airing? I will certainly tune in.

Investigation uses hidden cameras -- and Aunt Alice

Bob, Louisville, KY — Mon, 14 Apr 2008 14:54:26 GMT

While I enjoyed your show, I think you should expand upon the negative story of annuities in a series of shows. There is so much to uncover, you could have made this a mini series! You focused only on the surrender charges. You made no mention of the amazingly high fees and insurance expenses charged purchasers of these products while they own them. These variable annuities are nothing more than mutual fund investments with a veneer of insurance, which guard against loss. You pay for this insurance through yearly fees, which vary between 1-3% a year. The insurance company’s give nothing away. You pay for this ‘protection’. You’re buy insurance to protect against the stock market falling over a 15 year period, something that has yet to happen in the last 100 years. After you pay these fees, it is difficult to make a decent return, hardly worth tying your money up for 15-20 years. Put your the money in the bank. If you can’t afford to lose money don’t play the stock market.

You also have the issue of churning. My father and mother in law have been sold 3 of these annuities over the past 12 years. Every time they reset the annuity surrender holding period and their salesman (crook) gets another huge initial commission check as he sells them that this new annuity is better than the last. The commissions are very high (5-8%, or more) in the first year. The only reason these crooks push these are to get the high commission. The one fellow you highlighted at the end of the show, said he focuses on these variable annuity investments only…do you mean to tell me this is the best product for everyone? I think not…it’s the best thing for his wallet.

Annuities do have the benefit of tax deferral, which in some cases make them almost worth all the fees. However, when they are sold to folks with IRA’s (which are already tax deferred) this eliminates this benefit. My in-laws were convinced to buy this product inside an IRA. Another rip-off. The last sale was just a month or two after my father-in-law passed away, when the salesman pressured my mother-in-law to quickly make a decision, locking in 75% of her portfolio for 15 years, while securing him another huge commission check. They worked 40 years to development a nest egg and this crook is siphoning it off.

Investigation uses hidden cameras -- and Aunt Alice

Lindsey Jaffe — Mon, 14 Apr 2008 14:57:22 GMT

Dear Chris -
I am about to engage in what is called a "structured settlement" from a medical malpractice settlement. This will be in the form of an annuity purchased through an insurance company. Is this something I need to be leary of or are these annuities different altogether?

Investigation uses hidden cameras -- and Aunt Alice

Casey, Indianapolis, IN — Mon, 14 Apr 2008 14:59:06 GMT

As a 25 year old investment professional, I have seen all kinds of interesting things in my admittedly short career. One of the things I am happy about is that I work for a financial institution that does not allow more than 50% of any clients' money to be deposited into annuities, because of situations like this, even though a previous employer encouraged it.

Although there was an incredible amount of information that Mr. Hansen decided to ignore, regarding the positive side of annuity products, it is sad that there are agents and companies out there that will cripple a "client" just to make a few more dollars. FIA's, FA's, and VA's MIGHT have a place in a client's overall investment profile, but that is something to look into, for tax and cash reserve consequences. I am dismayed that Mr. Hansen completely neglected to report on the numerous companies that offer 5 and 7 year FIA products, all with surrender charges well below 10%. But, sensationalism for this network once again reared it's ugly head, and prevented ALL of the facts from coming to light. This article could have been so much more powerful and informative if, when speaking to the Insurance Comissioners, there where questions about validity of FIA's in general, as opposed to the ones that were listed.
If you want to do an expose, Mr. Hansen, I would suggest following up on the "Senior Advisor" designations, etc. There is no such thing as a recognized "Senior Planner" or advocate or any other such designation. While an individual can mention they have spent time working with and learning about senior issues, every agent in the country has, because that is were the money is. I will readily admit that I take as much time as I can to learn about tax benefits, rate and liquidity benefits (as well as nursing home waivers, death benefits and more) about policies and procedures, so that if there is a product need for a client, I can recommend something that meets as many of their needs as possible.

Furthermore, my institution has review and policies in place to limit the abuse of senior clients. But, there wasn't the mention of companies with that in your article either.

I would have preferred to see that you would have covered both sides of the fence, but I knew when this was sent to me that you wouldn't. So, I am asking you now, for the consumer sake, to please do a follow up on this subject matter, and the institutions and companies that work to protect their clients needs and rights.

Investigation uses hidden cameras -- and Aunt Alice

Audrey, Fort Worth, TX — Mon, 14 Apr 2008 15:02:31 GMT

I am definately shaken by the Dateline preview. Last year I was approached and purchased into annuities "A flexible Premium deferred annunity policy with a index benefit". I purchased two, one being an IRA and the other plan type I'm not sure. With a sinking feeling in the pit of my stomach I get my documents out and attempt to read it completely now, because I did not hear my sales person mention fees. I do have severe surrender charges and collectively I have roughly $100,000 in hard earned money in a company mentioned on Dateline and I am afraid. I thought I was doing the right thing by planning early for my retirement. I trusted my agent.

Investigation uses hidden cameras -- and Aunt Alice

Shawn, Las Vegas Nevada — Mon, 14 Apr 2008 15:19:25 GMT

I really enjoyed this investigation. I know it dealt with annuities and seniors, but there are companies like Primerica doing similar things to good people and getting their friends to do it to them. It sounds good when they present it to you but if crunch the numbers I think you will find it's a rip off. They make money by preying on individual with dreams of being financially independent and then telling them what and how to do it. Most people start the process and pay fees and then stop and the don't get the money back. It's another case of the rich getting richer and the poor getting porrer. Chirs should look into the practices of Primerica. I would love to see what he digs up on them. I think they use the same tricks of the trade shown on this episode.

Investigation uses hidden cameras -- and Aunt Alice

Ms.B, Owings Mills, MD — Mon, 14 Apr 2008 15:29:23 GMT

Chris:

I applaude you for all of the many DateLine investigative reports that you have undertaken over the years. Your balanced approach to identifying signficant scams and preditors (of every ilke) is the best form of consumer protection/education that American is receiving. Having said that, I am a 50 something retiree, who is a victim of the EIA sold by an Allianz agent in Maryland. In short, I attempted to transfer only $10,000 into a Fidelity product. Of course, the surrender charge would have cost me almost $4,000! I complained bitterly to Allianz, that the agent had informed me that I would have unfettered access to cash if I needed it. That his representations were patently false. The Allianz representative gave a cool, "I apologize" for the "misunderstanding."

Investigation uses hidden cameras -- and Aunt Alice

Tim, Morristown, New Jersey — Mon, 14 Apr 2008 15:35:35 GMT

As an investment advisor, I sent a link with comments to my clients encouraging them to watch your show, keeping their friends and family members in mind.

While I appreciated your efforts, I was disappointed that you didn't cover how some simple regulatory steps could all but eliminate these types of sales tactics. For example, the insurance companies should have appropriate disclaimers and suitibility questions written in clear and simple language which are signed by the client and made part of the contract. The good companies have already made this mandatory. Also the insurance companies should not be allowed to design contracts with such long surrender charges. Many respected firms only permit seven to nine year contracts with only a small percentage of a client's assets invested in this product.

The main issue not addressed is the fact that this product has long been considered a security by many compliance departments. Why the SEC does not simply require these products to be registered is a question many have been asking for years. If the product was in fact registered as a security then the sales and product would be supervised by the various compliance departments before an application is even processed. Our firm has a strict policy on these products, not because there isn't a place for them, but because of the potential abuse that exists not only with these but all financial sales. If the regulators want to seriously address these issues, they need only to register sales of these products as securities.

There are firms and sales offices who encourage their registered representatives to give up their licenses in order to avoid securities related supervision. This practice is going on in many states and will only continue without proper regulatory supervision.

Solving the problem is for the most part as simple as that!

Investigation uses hidden cameras -- and Aunt Alice

Ted H Franse — Mon, 14 Apr 2008 15:38:00 GMT

Dear Chris:

I do understand the frustration all folks must have with the improper selling and advising of EIA's. I have been in the Securities industry for over 23 years as a financial consultant and have seen lots of changes. As for EIA's, are they for everyone? Absolutely not! But do they serve a proper niche? Yes! For certain people, these investment vehicles can fill a part of their over-all financial plan. I do agree with FULL disclosure. Most EIA's; at least the ones I recommend, do allow for 10% free withdraws each year and the others out there should be required to do so. These are long term products, but should not have surrenders past 10 years, either. These products should be under the old NASD, now FINRA for total regulation and the insurance agents should be required to be security licensed too.Because EIA's are not, the crooks only need their basic insurance license. FINRA has in-directly put many mandates on us ture advisors, that do make us fully disclose and use proper practices to make sure it fits within the clients overall mix with their goals and objectives. You make us all look as crooks, which is not the case. If these agents were all to be securities licensed, then their Broker Dealers,could do the proper due diligence as mine does. We are required to get pre-approval from our home offices, from supervision on each and every EIA case, to make sure it is suitable for the client. We also must prove and have multiple signed statements, in addition to the EIA paperwork, that breaks down every potential guarantee and surrender charges etc.All these forms must then be sent in to our B/D for a complete look over. Our Broker Dealer also, only allows us to use EIA's from an approved list that has been approved by our supervision department, which I will stress does not include any EIA's with horrendous surrender periods. If its not on the list, we cannot write them, if we did, we would face sanctions and termination of employment also possible industry sanctions etc. If my Home office does not find that I have done my job properly, they will not allow me to do the case. Also, on policy placement/delivery, we must then again have the client sign that we have gone over everything in contract form. I agree that there are products that should not be allowed in the marketplace and have surrender charges twice as long as the ones I recommend. The ones I use, when it suits the clients needs are less than half what you spoke of.Bottom line: Make EIA's part of FINRA platform, make ALL agents have security license's so that they can be monitored by their B/D's Broker Dealers and the industry should be required remove the longer surrender period products, that shouldn't be available, anyway.

Now, as you know, your entire news show was all negative. Maybe sometime you can look to some positive aspects? But unfortunately our whole society is soooo negative, as you know and they thrive on NEGATIVE news! Kinda sad! Real sad!So that would not be an issue you would ever cover!

Ted H. Franse
Registered Principal and avery other license you can't imagine.

Investigation uses hidden cameras -- and Aunt Alice

Candelario Lopez Austin, Texas — Mon, 14 Apr 2008 15:38:31 GMT

My wife and I were sold one of these and after this report are wondering if anyone was able to recover their money without the penalties.
If yes how were you able to do it? We would like to recover ours.

Investigation uses hidden cameras -- and Aunt Alice

Dona Covington, Tampa, Fl — Mon, 14 Apr 2008 15:53:50 GMT

I too was sold an index annuity by my financial advisor who said he had set up the same plan for his mother. That it would keep my money safe. Not telling me I couldn't get to it for 10 years without a penalty. At the time I was 64 years old. So he should have known I might need it before 10 years.

Investigation uses hidden cameras -- and Aunt Alice

Todd Davis Lady Lake, Fl — Mon, 14 Apr 2008 15:57:48 GMT

Hi Chris, I totaly agree that there are bad people in every aspect of life but again that dosen't make everyone a bad person. I have a question that has not be presented and that is how about the Insurance commisioners offices that approve theses products before they are sold to the genreal public. If the insurance commisioner would do his/her job at the front end and not approve these products we would not be in this situation to begin with. I believe that every agent should disclose all of the material facts and be held accountable if they don't but also the investor has a responsibility to do there due diligence as well before handing over any money to anyone. I would like to see you address the insurance commisioner's office on how and why they approve these products vs them trying to be the consumers savor and come to their rescue via class action lawsuits when in reality they are partially to blame in the first place. To all the honest and ethical represenative's out there, continue helping and serving your clients financial needs.

Investigation uses hidden cameras -- and Aunt Alice

M. McNinch, Kelseyville, CA — Mon, 14 Apr 2008 16:09:56 GMT

Okay, Chris, now let's have a story about people who sell stocks that are not right for seniors. The brokers have been bad-mouthing annuities for some time now, because they cannot guarantee safety of principal, sos they want to destroy the competition. People who get stuck with annuties they don't like are usually people who do not do their research. There are good products out there that allow for withdrawal of money in emergency situations, and a person can usually withdraw 10% of their money annually without incurring any penalties. I know, because I am doing just that, and I am happy with my annuties. (I have 3.) I have now reached the age where I have to start annutizing, and I welcome this wonderful adjunct to my social security. I feel bad for those people, but you know what they say about how often fools are born.

Investigation uses hidden cameras -- and Aunt Alice

Joe Dicarlo peabody ma. — Mon, 14 Apr 2008 16:16:07 GMT

I'm one of those people that got scamed.I INVESTED 50.000 IN AN annuitie.Im 72 and got in for 10 years. Im glad someone is trying to help us older people.Dont believe a word from these so called insurance people i wish i could get out of this mess,Thanks for the show.

Investigation uses hidden cameras -- and Aunt Alice

Linda Schoener, Monee, IL — Mon, 14 Apr 2008 16:30:37 GMT

Chris,
Watched the program with great interest last night. We had to work on our father's behalf to get his inverstment back. In April 2007, we demanded the American Investors Life Insurance Co. out of Topeka, KS return our father's money. He too did not realize that once he signed the papers, he immediately lost $10,000 and he could not touch his money for 13 years. How much good would that money have done our father by the age of 95? I guess we were one of the lucky ones, because we were successful in getting his entire investment returned. These companies should be stopped and I hope there were plenty of seniors watching and are very careful who they trust.

Investigation uses hidden cameras -- and Aunt Alice

Brenda, Londonderry NH — Mon, 14 Apr 2008 16:31:26 GMT

I caught your piece last evening entitled Tricks of the Trade and I would like to comment that this does not only happen to the elderly. I am a 45 year old widow and was sold the same type of annuity from the company that was mentioned in your piece. This independant insurance broker used the same lines that were taught in the seminar. I was convinced to sell all of my stock holdings in a declining market and to put all the money into an annuity which was the 1st phase of my loss. The second came when I needed access to the money when my home was flooded in 2005. It came as quite a surprise to find out the fees I had to pay to liquidate the account. I ended up having to sell that home as I was working multiple jobs to keep food on the table while paying for repairs to the home.

Investigation uses hidden cameras -- and Aunt Alice

Rebecky,Minnesota — Mon, 14 Apr 2008 16:50:28 GMT

I think the messages above have a common thread. There are bad apples in every profession and there are two sides to every story. I just would have liked this sentiment reflected in the show. Shame on you! to those who are out to scam anyone. Good Job! to those of you who present insurance and investments in an ethical and moral way. The lesson... we need to be informed and ask questions any time we are dealing with our financial decisions whether this is buying a car, home, insurance, or investments. Look for a referral and back up your instincts with fact!

Investigation uses hidden cameras -- and Aunt Alice

Christine, Cincinnati OH — Mon, 14 Apr 2008 17:00:37 GMT

Chris,

You are just scratching the surface of this problem. I hope you can continue to educate everyone on these insurance products. My guess is you will get so much pressure from the insurance companies, banks, and brokers that you will not be able to continue with this series. It's a powerful industry and this is messing with their bread and butter.
I have worked in the financial service industry for 10 years. I have friends who started with insurance companies and they were only trained about one product to sell. In many cases, they don't have to obtain the series 7, or 66 and are encouraged not to get one. A registered rep has more stringent regulatory requirements to meet before providing advice. It’s very sad, because in some cases the people selling these products don't know alternative solutions that are much less expensive than a Variable annuity. The commissions are great and the insurance companies make a buddle. Many of the customers just hear the word guarantee and that’s all they care about. The guarantee is only as good as the insurance company’s ability to stay in business. What happens to their investment if the insurance company goes under? These products are not FDIC insured.
In my job, I work with people who leave their employers 401k plans, already tax deferred with extremely low costs, to invest in equity indexed annuities. We try to educate them, but they have been sold. I hope you can continue this series. I hope you can show in what circumstances fixed rate annuities make sense, because those can be very beneficial.
It also needs to be made clear that money that is already tax deferred in a 401k, IRA, or any other pretax retirement account does not need an expensive tax sheltered V/A. In most cases, long term investing in the market with a diversified mix will prove more profitable for the customer. After all how do you think the insurance companies that scare people about the stock market are investing? They know over the long term the market will make money, a historic truth, and they are betting that they will make more than they have to pay out, especially after fees, and expenses, plus they make sure the person has to stay in long term (surrender charges) and there you have it... a very profitable product for a large company.

Good Luck! I really hope you can continue this series and show specific situations where an annuity would make sense and where it doesn't.

Investigation uses hidden cameras -- and Aunt Alice

Michelle, St Simons Island, GA — Mon, 14 Apr 2008 17:04:17 GMT

Chris,

I am a huge fan of your show! I think its very important that we know all of the risks that are out there and that we are truly educated on every financial product before we buy.

I began working in the insurance business only 2 yrs ago but the agent I work for has been in the business for almost 25 yrs. We do not sell EIA because we don't believe they are a good product for anyone. We have several other investments that we think are better than any annuity product.

I think its wonderful that you did this particular show because I know that older people can be mislead and the insurance "lingo" often gets lost in translation.

I was horrified that there are agents who readily lay down a couple thousand to add their names and pictures to magazine articles, books, etc. It makes me very thankful that I work for such a responsible and honorable agent and company that would never allow such things.

Keep up the good work - I look forward to the next show!

Investigation uses hidden cameras -- and Aunt Alice

Sandy, Youngstown, OH — Mon, 14 Apr 2008 17:07:19 GMT

Dear Chris,

My retirement funds are split between an Equity Indexed Annuity from Allianz and a Mutual Fund from a big investment brokerage firm. I wish I had it all in Allianz at this point. I've lost a bundle in the mutual fund. The brokerage suggested a variable annuity. That would be worse because, in addition to my losses, I would have withdrawal penalties. Within the last year, my bank sent me a flyer asking me to come in and talk to their officer about investing in their Indexed Annuity. So why aren't the banks included in investment advice misreprestation when it comes to these so called questionable indexed annuities. And for that matter, why didn't you include the brokerage firms for pushing their variable annuites which are worse?

Investigation uses hidden cameras -- and Aunt Alice

William R. Locklin, Temecula, CA — Mon, 14 Apr 2008 17:26:31 GMT

Your statements about CDs were false. If you close your CD at the wrong time you will forfeit ALL the interest that has accumulated PLUS some of your principal. I became aware of this when I was named successor trustee when my mother passed away. Also, when a bank fails, the FDIC always tries to get out of paying by claiming fraud on the part of the bank management. FDIC will not pay in case of fraud, and they usually try to prove that fraud was involved. They only pay in the case of "mismanagement". On the other hand, the securities industry insurance through SIPC pays in the case of fraud, and NOT in the case of mismanagement.

Investigation uses hidden cameras -- and Aunt Alice

F Brauneck, Macon GA — Mon, 14 Apr 2008 17:35:44 GMT

I am 55 years young, own two index annuities (for many years) and think they are one of the best parts of my portfolio. Unfortunately there are some bad agents out there, but not as many as Lori Swanson would like you to believe (is she running for governor or something?). Does the Securities and Exchange Commission not like them because they are bad or just not like them when money comes out of THEIR products to go into index annuities? Most people just don't understand what they are and what they can do, regardless of commissions (How high are commissions on commercial real estate - 10%?)...

Investigation uses hidden cameras -- and Aunt Alice

Steve, CA — Mon, 14 Apr 2008 17:55:04 GMT

Chris,
I watched with interest your story on Equity Index Annuities. I work in the annuity industry as a wholesaler (no EIA's). One point that was never brought up though was the fact that it is each states own Insurance Commission who approves the products to be sold. If an Insurance Commission approves a product to be sold to an 80 year old with a 20 year surrender charge, Why? States could end this problem easily by limiting the maximum issue age or surrender charges. I have worked with broker-dealers in the past that have put their own restrictions on the length and age and it has taken the problem away. Once you get over 10 years of surrender charges, the benefit is truly for the advisor's, not the clients. If someone wants to buy a EIA, stick to the ones with surrender charges of less then 8 years and most of the junk is filtered out.

Investigation uses hidden cameras -- and Aunt Alice

Boston, MA — Mon, 14 Apr 2008 18:02:05 GMT

Chris

Honestly why don't you tell the whole story. People who invest in the market are losing money all the time, usually a lot more than any surrender charge that an insurance company charges not only that they are being charged by the broker to lose there money.

Also in Variable annuities there are the same type surrneder charges as EIA's. As well as sales charges and annual charges, that are the same as a commission, except in the VA you can actually lose principle. Where was that exposure, in last nights piece.

You are NOT a responsilbe reporter, and did not show any of the good that these products can provide. Nice generalization of an industry and a great product. I am wondering how much the Securities and Exchange Commission or one of these huge investment companies paid you to bash a perfectly good product.

If you have any integrity at all you will do a piece on the stock brokers and there total abuse of seniors and promising them the world and providing nothing in regards to protection, I was hoping to maybe see a little of that last night, but you had an agenda. Who provided that agenda for you, lets just say I think all that watched lat night can figure that out.

By the way Aunt Alice would have done herself a favor by buying an annuity, atleast the money is protected

Investigation uses hidden cameras -- and Aunt Alice

DIRK RACETTE, GRAND RAPIDS, MICHIGAN — Mon, 14 Apr 2008 18:12:28 GMT

I am a FEE ONLY investment advisor and in some LIMITED circumstances annuities can make sense. However, when someone pays a commission of 10 to 15% for any product upfront then the salesman has no incentive to continue to look out for the clients best interest. You should also have addressed the practice of placing a clients IRA within an annuity. I have run into this on many occasions and the only person who benefits is the agent. Why does anyone need to buy an investment with double tax deferral?

Investigation uses hidden cameras -- and Aunt Alice

Chris Thomas, Sacramento , CA — Mon, 14 Apr 2008 18:29:45 GMT

Dear Chris,
No where in your story did you talk about safety or the history of annuities, every retiree in the United States receives there retirement check from an annuity
be it military,state ,Federal or union, walmart Macys ect...... the federal Goverment is not going to pay there retirees from a wall street account or a deregulated bank account.
Insurnace companys are the only Finacial Institutions that have governing State agencys that control there actions and they must at all time hold 103% cash reserves to meet there policy holders account. Banks answer to no one thats why they can set there credit card rates at 31% and pay the account holders 3% but lend there money out at 12%. Also Lori Swanson settle her allegations with Allianz 6 months ago. Why is the Department of Insurance for Minnesota not mention there the Govt Agency that approves any product sold in the state to seniors. I think she has it out for Allianz because they did not bow down to her.

Investigation uses hidden cameras -- and Aunt Alice

lb,mercer is,wash — Mon, 14 Apr 2008 18:34:27 GMT

In oct3,2007 I bought a Individual Deferred Equity annuity contract with Great American life Ins.co. Is this co. very realiable and trust worthy? For $114,000.oo.

Investigation uses hidden cameras -- and Aunt Alice

Carole Ann Hofhines, Meridian, ID — Mon, 14 Apr 2008 18:34:41 GMT

Dear Dateline,

I watched your show last night with anticipation, having heard that it would “Slaughter” those in the financial advisory fields. As I watched the show I was disgusted with the practices of double talk and scare tactics of the agents shown. I continued to watch waiting for “the other shoe” to drop. I was waiting for you to show at least one agent that was honest and showed integrity. Sadly, I was disappointed with your show, which came across as doing nothing more then attempt to scare seniors into avoiding a particular profession and product. I found it ironic that you used the same tactics that you pointed out were being used by the agents.

I was hoping that before the show was over there would be some tag line or calcification that would have said, “Clearly this product was not correct for these people and these agents knew it. Not all agents are like these two. We interviewed several that were responsible and would not recommend using the EIA in this case.”

It would have been nice if you would have also checked out some other seminars that don’t use “scare tactics”.

All in all, I feel the show was lop-sided and did not show both sides of the business.

My husband is securities licensed and we have a small family firm and all though this is aimed mostly at insurance agents, the public are not generally aware of the different regulations we are subject to. So in attempt to expose some bad apples you have taken a shot-gun approach to handle a sniper job. Should those agents be covered in honey and tied to an ant hill, most likely! Should you have done a more investigatory two sided story, most definitely!

I too have elderly have parents, grandparent, aunts and uncles, which does not excuse overly emotional one-sided reporting. (I am trying not to say lazy and bias)

Investigation uses hidden cameras -- and Aunt Alice

Alfred W. Hovis, Jr., ChFC, CLTC, LUTCF — Mon, 14 Apr 2008 18:42:41 GMT

The dateline piece on Equity Indexed Annuities went a long way to warning the public about self-serving agents misuing this product. The insurance companies offering this product are at best 2nd tier companies in which one would, with enough knowledge, not entrust their funds. These insurance companies entice this business by paying out exorbinant commissions to the writing agents. In my 32 years in the insurance and investment business I have not seen any product with so few legitimate uses for the conusmer.
Allianz, the largest provider of these annuities, has a very poor history. They refused to pay life insurance claims to Jews put to death in Nazi death camps until forced to through a lawsuit. Headquarted in Germany, Allianz has proven itselt to be one of the least responsible corporate citizens here in the states. I can only imagine what they do to consumers in other countries.
I urge all ethical agents to help Equity Indexed Annuity policyholders to contact their state's attorney general to learn whether there is pending class action suits being brought against the company they purchased their EIA through.
Finally, to the one blogger, Matthew Taylor, CFP, Harrisburg, Pennsylvania who stated that the annuity holder gets to keep the bonus credited to the contract with the surrender charge being lower due to this fact. Well fact is, the bonus is taken away AND the surender charge is assessed. This is a perfect example to those selling these things not knowing themselves how the contract works.
If the agents are unclear of the workings of these annuities, how is the consumer to make an informed decision. They can't.

Investigation uses hidden cameras -- and Aunt Alice

Larry, Philadelphia, PA — Mon, 14 Apr 2008 19:04:27 GMT

WOW! Many people out there have "drank the kool-aid." FIA's are all a scam! FIA's are the best product since the 6-month CD! A diversified portfolio of securities is the only way to go! Securities are horrible for all seniors! Your bloggers have all the answers and each industry thinks they are right and everyone else is wrong. Unfortunately, Chris, you, too, have fallen into the trap of looking at the retail investment market as a "black and white" issue. Nothing could be further from the truth. There are too many insurance agents who knowingly deceive their prospective clients in order to make a sale. That is criminal and you have attempted to do a service by broadcasting what to look for. There are just as many securities representives doing the same thing, only with different products. Please don't confuse the product with the sales practice. It is a narrow-minded approach and you are better than that.

Please follow up this report with an investigation into the regulatory agencies under whose watch these abuses take place. That is a much bigger story and one with a much broader impact than the poor guy who wound up in an unsuitable annuity with his life savings of $40,000. By the way, he surely should never have been sold that annuity. But, when he cashed it in, he did get back $34,000. Not good at all, but, he did not lose all his money. Don't insult us by suggesting that his $6,000 loss caused him to sell his home. Again, you are a better journalist than that, aren't you?

Investigation uses hidden cameras -- and Aunt Alice

Mac, North Carolina — Mon, 14 Apr 2008 19:17:17 GMT

Chris,
Your show was very interesting last night. I, being in the industry, was very interested to see what type of "bad apple" agents you would be able to drudge up. When I was trained, I was actually warned about selling products for some of the giant insurance companies. You spoke in detail on one of those companies last night. You also at one point showed four brochures of certain products offered by certain companies. When my boss was training me, the EXACT companies and products you showed were the ones that he warned against. Personally, I can tell you ahead of time that the largest commission available on any of the products that I sell is 7%. Both my boss, myself and my coworkers all live in the main community in which we conduct business. It is predominantly a retirement community. We are all, well respected and held in high regard amongst our neighbors because we adhere to very strict guidlines as to what we will sell. My boss told me from the very beginning that one of my main jobs was to constantly be looking for the most consumer friendly products available on the market. To be completely honest, the one question that never comes up when we are considering a new product is, "What's our commission rate?" We don't find that out until our check shows up. Fixed Indexed Annuities can be a WONDERFUL tool for a PORTION of a retiree's money. I felt so confident about this that I DID actually sign both of my own parents up with portions of their retirement. I have noticed a few brokers who continuelly make comments regarding our "HUGE" commissions. This is true with some of the lousier products available today. But, in a quality product, the commissions are drastically lower. The main point I would make to any of these investment advisors "brokers" is first, that the commission DOES NOT COME FROM THE CLIENTS FUNDS! The clients are not paying me from their money at all. Second, What does a broker charge ANNUALLY to help "manage" your account? Also, does the broker charge you whether your account goes up and down? Of course they do! You tell me, what is better, a one time shot commission of 7% which doesn't come from your money, or a 1.5% to as high as 4% annual fee than comes directly from your account, WHETHER YOU WERE UP OR DOWN! The main problem is this, while I do not by any means deny that there are people out there selling lousy annuities to seniors without disclosing the possible negative effects, there are just as many if not more who are promoting solid investments for portions of a retiree's money. I tell every single client, in exact words..."If you know that you need more than 10% of these funds each year, then this is absolutely the wrong place for your money!" Lumping us all in to with a few bad apples is wrong and I do hope that you will make reference to this in an upcoming show regardless of ratings.

Investigation uses hidden cameras -- and Aunt Alice

Mark, TX — Mon, 14 Apr 2008 19:17:27 GMT

Questions? Why was the Dept. of Insurance not given a voice in this presentation? The product is licensed by the Dept. of Insurance in every state, yet you asked Joseph Borg who has no authority over this product.

We all agree regarding "rogue" agents. They make it tough for everyone who does it right, but so do "rogue" police. That does not make all law enforcement agents bad nor does it make all Insurance agents bad.

If you want to cover it all, then cover agents that do it right and show a senior how to ask the right questions.
Example:
1. What is the percentage of surrender per year if I take more than the free allowed amount out?
2. Is the Bonus an upfront Bounus or does it require annuitization in order to get this bonus?
3. Does it have Terminal Illness or Nursing home waivers and what is the age limit on these?
4. Are there other annuities that are more liquid than the traditional 10% free out per year? (YES)

We could list many others. It's interesting that neither the Attorney General nor Mr. Borg, nor Dateline could give the public information on how to ask the right questions....... because they don't know themselves.

Dateline you had a great opportunity to get it right and you "blew it" because of your narrow focus.

The Dept. of Insurance could actually help you with this since they are the ones that actually approve each of these products and have authority over it.

Question: Dateline would you cover other financial professionals that will take a Senior's money, invest it in securities regulated products like Variable Annuities, Stocks, Mutual Funds, Hedge Funds,etc. and see "IF" the financial advisor acts in the best interest of the client when they put a Senior's money in aggressive growth instruments. Let's see if the product fits, how the broker acts and how the client responds when they have lost that money? Talk with Mr. Borg on that.......second thought maybe talk with the Dept. of Insurance on it.....that keeps it fair.

That leads to the "real" question.....
Is the investment suitable and does it fit their need?
I think we can all agree that no two stocks perform and return the same, neither do mutual funds, or CD's, or Cars or anything else for that matter!
Annuities are no different, each is different and each performs in different ways and has different features. Education in knowing what to ask is the key and the people that watched this program learned only one question. What is the surrender amount? Is that the best that Dateline can do for it's viewing public? One question in 60 minutes with the slant that all Equity Indexed Annuities are the same. As one other famous TV spoke person says..."GIVE ME A BREAK"!

Investigation uses hidden cameras -- and Aunt Alice

Nancie Liles, Hendersonville, NC — Mon, 14 Apr 2008 19:25:21 GMT

I recently purchased an annuity and am quite pleased with my decision. My agent was very forthcoming and answered all of my questions. What amazed me was that the actual figure given to me on my old 403B had NEVER reflected fees charged to me by to my broker. When I moved the funds I found I actually had thousands less than the statement had led me to believe because the broker's fees were not included in my monthly statements. As to your show, it was a great idea -- it should have been aimed at keeping the insurance profession honest by telling clients what to look for instead of 'fear them all'.The show was more like an ambush to one of the agents you showed. Aunt Alice's interview was barely off the ground when you came in and stopped the interviewing process. My agent not only told me about early surrender fees, but before I signed the application he pointed out the information in print AND I signed that I had read and understood the terms. Also, the annuity I purchased had an immediate 10% bonus! Please do not cause unreasonable fear in people who are honestly looking to invest their retirement funds. You gave a very lopsided, slanted point of view. Surely you didn't do this to promote stock brokers during these frightening financial times.... did you?

Investigation uses hidden cameras -- and Aunt Alice

Sheryl J. Moore, Des Moines, IA — Mon, 14 Apr 2008 19:49:50 GMT

My name is Sheryl J. Moore, and I am an independent market research analyst that owns a consulting firm which tracks every product and company in the indexed annuity market, as well as the sales of the products. I have been awaiting this segment, and warning my clients in the indexed annuity market about it since last November.

I must admit, was sorely disappointed after seeing this undercover investigation.

Was Dateline trying to use psychological methods by repeating the chant “indexed annuities have lengthy surrender charges?”

Fact: the average surrender charge duration on indexed annuities sold as of the fourth quarter of 2007 was ten years. (Source: AnnuitySpecs.com Advantage Index Sales & Market Report.) Are there products on the market with longer surrender charges? Yes- as long as 16 years and as short as one year, but longer-term products usually come with a premium bonus to enhance the consumer’s cash value (hence those “hefty surrender penalties” your producers kept pointing out on the show; yet no mention of the benefit the consumer gets from the bonus?).

Furthermore, what were producers trying to accomplish by alluding that indexed annuities are illiquid? Fact: 92% of all indexed annuities offer 10% penalty-free withdrawals annually with no cumulative limit, and some offer 20% penalty-free withdrawals! (Source: AnnuitySpecs.com)

Another aspect of disappointment was using Attorney General Lori Swanson as a credible source of information on indexed annuity products. Is this a reliable person to provide unbiased information on the product line? Would you rely on someone who is suing carriers that offer indexed annuities, just for her own political gain? In all fairness, Chris Hansen should have disclosed that Minnesota's legislative auditor has launched a preliminary investigation into allegations of ethical and legal lapses in Attorney General Lori Swanson's office (of interest, Swanson and some of her top aides have been accused of trying to find defendants to fit lawsuits on high-profile topics.) Coincidence?

Indexed annuities are not a one-product-fits-all solution and there is never an excuse for agents behaving badly. Yes, at times indexed annuities are the instruments that are used in the course of bad agent behavior. However, I would hope that by now Chris Hanson, along with all of your viewers, would realize that this is the case with ANY financial product. Insurance companies in this industry do not put up with it. Market conduct and suitability (particularly senior suitability) have been a primary focus in our industry since Fall of 2005, and tremendous strides have been made.

Overall, I will close with the fact that I hope your investigation was a big wake-up call for all of the agents that aren’t doing their job and disclosing all of the facts to their clients. DO YOUR JOBS IF YOU WANT THESE VALUABLE PRODUCTS TO BE AVAILABLE FOR YOUR CLIENTS! To Lori Swanson, you need to worry more about your consumers than about suing indexed annuity carriers just for the sake of suing and headlines. And to Chris Hanson, a special message- indexed annuities are NOT investment products.

As a consumer, I rely on the news for unbiased information that provides BOTH sides of the story. I wish I could have received that with your broadcast.

Investigation uses hidden cameras -- and Aunt Alice

Pat Carpenter, Dillsboro,In — Mon, 14 Apr 2008 19:52:44 GMT

I was so glad to see you show on annuities last night.
I worked for a company for 5 years and seen this go on all the time, even with regular annuities.

All they are interested in is the commissions. They really do not care about the people.

Again, great show. We need more of this!

Investigation uses hidden cameras -- and Aunt Alice

Honest Advisor, Texas — Mon, 14 Apr 2008 20:26:22 GMT

As a financial advisor, I can't thank you enough for being willing to expose these criminals. I hope you'll make a series out of this topic like you have in the past on other issues. There are very few situations in which an annuity of any kind is appropriate, but they are mis-sold so often, I wish they would be banned altogether. As if these crooks don't do enough damage already, the latest trend is for an agent to call the customer about a year after the sale of the annuity and suggest they take their 10% "free withdrawal" out of the existing contract and move it into another "better" annuity. This is an illegal practice call churning, and it causes the customer to incur surrender fees, lose interest and begin a whole new surrender period. Of course, the agent get another commission by doing this, and for those guys, that's what it's all about.

Investigation uses hidden cameras -- and Aunt Alice

Deb MS — Mon, 14 Apr 2008 20:27:51 GMT

I wish this segment had aired 9 months ago before my husband invested all of his 401K to one of these "commission driven CROOKS." This guy used the scare tactic of "take your money out of your 401K before your company takes it." During the whole time this "SO CALLED CHRISTIAN" was getting all of my husband's money I kept asking this guy will there be a penalty if we take it out for emergencies. "Absolutely not" he replied. "In fact, I will give you some checks to make it easy for you to take it out, but you do want it to stay in the account to draw interest." Now, my husband and I are paying Uncle Sam over $100,000. KNOW ANY GOOD LAWYERS!!!!

Investigation uses hidden cameras -- and Aunt Alice

ernie, baltimore md. — Mon, 14 Apr 2008 20:30:32 GMT

chris; i`am 62 and looking for place to put my money do you know of a save and fair company that I can trust with my life savings its not a lot but its all
hard earn money that I worked for.

Investigation uses hidden cameras -- and Aunt Alice

Kristen, Dallas, Texas — Mon, 14 Apr 2008 20:49:46 GMT

Chris, Just an FYI. You CAN lose principal on a bank-issued CD, if you withdraw it before any interest has accumulated (usually within the first 6 months of it being issued). The statement on your show that you can't lose principal in a CD was an out and out lie. Also, while FDIC is a relatively good thing, if you go to their web site there in the fine print are the details of how long they can take to pay, and what they can pay you with. While they may have paid up to consumers to this date, that is not guaranteed in the future. Insurance companies are usually required to keep a reserve well above the moneys they are taking (as opposed to the minimal amounts the FDIC keeps) in order to sell annuities and life insurance. Just check their ratings to see the reserve amount. While I usually love the reports you do, this story was extremely one sided and unfair. There are agents who love helping clients with what is best for the client, and act accordingly as honest agents.

Investigation uses hidden cameras -- and Aunt Alice

Linda, Ambler, PA — Mon, 14 Apr 2008 21:23:32 GMT

Dear Chris,
My 76 year old mother was sold a MetLife annuity by PNC Bank investment services. She trusted PNC since she had been doing her banking there for years. This investment was described like a CD. No mention of surrender penalty except in a lengthy booklet. The surrender penalty period was 8 years. The interest income rate was only 2% for 3 years until she decided to pay the 6% surrender penalty and get out to make better interest elsewhere. She was advised by her CPA that that these surrender penalties are not tax deductible. They are NOT like early withdrawal penalties of CD's to be deducted against interest income. They are NOT investment losses for the tax return. They are just losses to poor seniors when they need their funds most.

Investigation uses hidden cameras -- and Aunt Alice

Nick, Evansville, IN — Mon, 14 Apr 2008 21:49:06 GMT

Dateline is just as guilty of scare tactics as the insurance agents they highlighted in the story. They gave no information on when an EIA would be a good investment. They scared people with surrender charges of 15-20%. Those are high, but that can be lost in a day in the stock market. Also, they mentioned the need to access money in case of a medical emergency. Dateline failed to mention that some of these policies have riders that allow penalty-free access to money in certain medically-necessary situations. Also, did any of the annuities they highlighted have any premium bonuses? I am in the business and do offer annuities under the right conditions. The main one I use offers an 11.5% premium bonus. That means for every dollar you deposit you get an 11.5% credit right away. This policy has a surrender charge of 18%. Sounds terrible, right? Well remember you can get 10% without penalty. So the surrender charge applies to 90% of your deposit. So, in my example lets say someone deposits $100,000. Their account value is $111,500 with the premium bonus. Lets so they have no index gain and want to surrender the entire contract. They get 10% or $11,150 without penalty. The other 90% is penalized at 18% or 18,0000. This leaves them with 111,500-18000=$93,500. So the 18% penalty is really only 6.5%. Still lost some principal, but what if that money had been in the market. Since there was no index gain it means the market most likely had a down year. It's likely you would have lost principal in stocks/mutual funds as well.

Lets say a man in his early 60's has retired early and has an IRA that is made up entirely of mutual funds. He saw what happened to his account values after 2001. He has waited patiently and his account has rebounded. He is no longer funding his IRA now that he is retired. He doesn't plan on making any withdrawals between now and 70 1/2, when he has to take his minimum distribution. He wants something that will maintain his cash value that has the chance of larger gains than a bank cd. An EIA is perfect for him.

Dateline also failed to mention that annuities can help defer (and lower) your taxes. And since they are a contract with a life insurance company they avoid probate at death and pass directly to the beneficiary.

Annuities are designed for older people. They have IRS witdrawal penalties on top of surrender charges for anyone under 59 1/2.

Dateline also didn't get to filling out a contract with these agents. The application for an EIA has a suitability questionairre and a page for the applicant to sign acknowledging any applicable surrender charges. Most companies will not let someone take out an EIA if the amount they want to deposit is a significant portion of their assets. The assets they use to determine this usually exclude their house. Using only cash assets for the factoring.

Dateline is just as guilty of only giving one side of the story.

Investigation uses hidden cameras -- and Aunt Alice

Steven G., Virginia — Mon, 14 Apr 2008 21:49:50 GMT

To: Chris Hansen
Dateline, NBC

Dear Mr. Hansen,

I want to commend you for your expose' on indexed annuity sales tactics and the teachings behind how many agents act. Your staff may recall that I offered to help with your investigation and expose some of these very distasteful practices back in January 2007 in a letter emailed to dateline. Working in the industry, we come across these types of actions and teachings all of the time and we know it is not good for the industry as whole or for the clients who are taken advantage of. We would also like to see minimum acceptable standards for the industry raised.

I do believe your investigation missed what is probably the biggest story and scandal of all - how these entities work together. You have the insurance company (Allianz in your investigation), the Field Marketing Organization (FMO) (Tyrone Clark and Brokers Choice America – BCA), the mentoring agents and the individual insurance agents.

Here is how it really works: An insurance company (like Allianz) may own all or part of a company like BCA, which is an FMO. The FMO will then recruit and contract agents and receive an override on all of the agents’ insurance business. The FMO will usually provide most of the training for the insurance agents and will frequently pair the agent up with a mentor, who also receives an override, and then the FMO will help the agent with marketing and with client case design, in effect recommending the annuity product via the agent.

In your investigation this connection was missed and this is where industry information would have been useful to you and your staff. It is my opinion that the insurance companies bear a significant and direct responsibility for what has been occurring in the field. The FMOs may have the most culpability because, as you discovered, the FMO is actually teaching the insurance agent what to do and how to market by using books and seminars, with scripts provided, and then taking a direct role in the actual recommendation of product to the client. It is also common for an agent to have a mentor who will reiterate the seminar and appointment training from the FMO and personally guide the agents’ development. I am not saying the agent does not have a responsibility to fully disclose product features both good and bad in a truthful manner. I am saying that there are tens of thousands of agents who are trained by the FMOs in the very same way you discovered and the insurance companies know about it and support it via ownership of the FMOs and/or frequent sponsorship of the agent training events. It is comical to hear the insurance companies say they are “cracking down on agents” when it is the insurance companies that pay for the agents training and mentoring via a third party FMO. That is where the real story is.

As far as the business of ghost written articles, books and magazines, it is rampant in the insurance, investment and many other industries as well. I have had attorneys and accountants give me books they say they wrote only to find out later it was written by someone else because yet another attorney or accountant gave me the same book and stated that it was authored by them. Even politicians and CEOs’ have done it. I made the same mistake myself of ghost writing a book with an attorney who did most of the writing. A short time later I pulled all distributable copies of the book because of the many errors of which I had no creative control to change. After that regrettable experience I resolved to do, and have done, all of my own writing. Unfortunately the publisher still uses my image in an unauthorized fashion to sell ghost written books to other advisors. There are very few originally authored items in financial services because of all the compliance hoops that have to be jumped through. I get weekly emails from large investment companies offering free articles to use in my newsletter that can be “cut and pasted” and are approved for use with my name as the author. I don’t use them but thousands of advisors do.

I do think it was inappropriate for the State of Alabama to issue your producers fake insurance licenses to attend the agent training. It seems deceitful and hypocritical and it was probably illegal. As far as I know, dateline staff members are not government agents and by implying that they were properly licensed insurance agents they falsified their credentials. Those actions are eerily similar to the ones you were trying to expose. You could have easily found a properly licensed insurance agent to carry a hidden camera or even an official government agent could have done it. Broker’s Choice would have probably welcomed in a local reporter because they invited a Wall Street Journal writer to attend their event previously. I think it is important for a show like Dateline to maintain its integrity, both journalistic and otherwise, when pointing the finger at others. It reminds me of the fake Chevy truck explosion you guys rigged years ago. NBC and Dateline should not have to resort to these objectionably repugnant reporting techniques.

Still, I am glad to see some of the unscrupulous insurance industry tactics revealed to the public.

Sincerely,
Steven G.

Investigation uses hidden cameras -- and Aunt Alice

Beverly Cooper, Louisville, KY — Mon, 14 Apr 2008 22:13:04 GMT

I would love to get information on how to file a complaint.My mother was sold a $150K annuity at the age of 82 for a 15 year certain term. She passed away last month (only 15 months after purchasing). The person that sold it should be reported as well as the company that received her money. I am considering hiring an attorney but I hate to waste the money if there is not a chance of gaining anything. The investment company stated that it cannot be cashed out. Is there somewhere I can turn? Thank you.

Investigation uses hidden cameras -- and Aunt Alice

Ronald Campbell,Homosassa,FL — Mon, 14 Apr 2008 22:30:48 GMT

Watched your show on insurance fraud.I live in a senior retirement community and would it be possible
to get a copy of that show? I would like to make it available in our park libary.I shudder to think how many neighbors get taken by these scammers.

Investigation uses hidden cameras -- and Aunt Alice

Honest Rep, North Dakota — Mon, 14 Apr 2008 22:31:17 GMT

Dear Dateline Staff,
I have a couple questions that need to be answered,1) After a Two year period is it possible to have a surrender value worth more than the principle that was put into the contract? 2) If someone was to let`s say invest in a mutual fund, stock, variable annuity, bonds and the market does not perform and goes backwards and they want to take the money out for emergency for the grandson do they recieve they`re origanal principal.
When companies send out complex statements, does it show the service fees or charges. I believe they take it off the gain, If no gain they subtract it off the principle.
Someone whose 30 doesn`t have the same needs that someone whose 75. Not everyone is suitable for annuities as well as not eveyone is suitable for stocks,mutual funds,ect. If the market went down 40% and the client would like to get out money, would you rather take a 20% to a 10% surrender charge or a 40% loss.
I hope in the future you show equally the good honest agents as well as the not so good. Maybe even take a look at brokers and bankers. why is it brokers want this product regulated by NASD or the SEC? I`ve read some of the the other comments and what baffles me is Dr. Morinick says the company keeps the gains over 10 to 15%, when the market goes south then what happens? Yeah that`s right you get 0. Everyone has they`re own opinions! chevy or ford?
But please make sure everyone`s opinions are seen or heard.
Thank You, Honest Rep

Investigation uses hidden cameras -- and Aunt Alice

Stacey, Woodland Ca — Mon, 14 Apr 2008 22:49:48 GMT

I didn't catch the show but was told about it and also read some on the site. And I agree with what some have been saying about that there are two sides of every situation that should be told. I personally know of an Advisor that writes Annuities and is extremely honest with all of his clients. And as others have been mentioning, there are always good and bad folks out there in every industry trying to take advantage of people and especially older folks. I work in Law Enforcement and see this all the time. So I take offense that this show makes my Advisor sound like "a crooked advisor". Maybe you should have segment on all the great Advisors out there that follow good ethics, have security license's and Broker Dealers to go through. My Advisor rocks (Ted H. Franse
Registered Principal)and would refer him to anyone that listens to me and trust him with my money as other of my family has.
Thanks

Investigation uses hidden cameras -- and Aunt Alice

Joe Kenilworth, NJ — Mon, 14 Apr 2008 22:51:11 GMT

Hey Chris

I am a Certified Financial Planner in NJ and work on commission. The show you produced was a disgrace.
How can you spend an entire hour on the subject of surrender period and fees and not talk about the positive things about index annuities? People are bound to think that all annuities are a bad investment
and I feel by showing just part of the agents' comments things were taken out of context. The 2 products you talked about American Equity and Aviva
both offer 10% bonuses of the deposit which covers the higher surrender fees. The break even point on these products at just 3% (but one should return more since they are tied to the S&P 500 Index) is about 3.5 years. But since you really do not know anything about the product you did a great disservice to many potential investors and hurt many insurance agents and planners livelihoods.

Investigation uses hidden cameras -- and Aunt Alice

John Staten Island, NY — Mon, 14 Apr 2008 22:58:33 GMT

Chris Hansen

I was wondering if there were any agents you setup and "lied to" that actually did the right thing and disclosed all the policy features, including the surrender period, but decided not to air them or comment about that. Also I noticed Ameritrade had a commercial during your showing. Are you sure they did not have anything to do with this stunt? Since the securities industry is trying to rest control of Index Annuities from the insurance companies because they are losing alot of assets to them. I guess you did not know that either.

Investigation uses hidden cameras -- and Aunt Alice

Scott Pearlstone, St. Louis, MO — Mon, 14 Apr 2008 23:27:04 GMT

Dear Chris,

I enjoyed your story, and I am very familiar with the issues you addressed. There are many more details about many annuity products which are troubling that you did not present.

However, without getting bogged down in those details, let me just offer that these predatory sales tactics will not stop until the state insurance regulators and/or state legislatures take action.

State insurance regulators must approve these annuity products for sale in their respective states. The salesmen are no doubt often greedy and sometimes fraudulent about their credentials, but they are just salesman selling a product--they do not have fiduciary duties to the people to whom they sell.

The real problem is these salesmen are selling the annuity products exactly as the insurance company wants them to (and as the state insurance departments have approved!)--that is why the products are structured the way they are--with up-front "bonuses" and later "surrender penalties."

If you want real change, you need to go after the Insurance Companies/Insurance Commisioners and change the way these products are allowed to be structured and presented.

One place to start would be to require the insurance agents to disclose the huge commisions (in actual dollars) they get as soon as you sign the contract--it is these commissions that the insurance companies are trying to recoup with their onerous surrender penalties.

Investigation uses hidden cameras -- and Aunt Alice

PLJ Oswego, Illinois — Mon, 14 Apr 2008 23:55:23 GMT

Hello Chris
My Mother was tricked, just like the people on your program. The agent drove 6 hrs from his home state of Wisconsin to Illinois my Mothers residence, to have her sign the forms then drove himself back home again.
She thought she was signing a withdrawl. She needed funds to pay her real estate taxes.
She was 84 yrs old. He locked her into a 12yr 15% surrender penalty, she will be 96 when she can finally get her money (she is now 88) He did put a rider on the Annuity, 60 days in a Nursing Home. She is in an Assisted Living home, that doesn't count. It has to me a State Nursing Home. She can not use her money to pay for her monthly expenses, unless she pays the 15% penalty.
I have been told to hire an attorney, unless it is a class action suit, she will lose even more money.
I need to know how to trick them into letting my Mother have her money. They are holding all the cards.
Do I contact the Illinois States Attorney?
Does anyone have any ideas?

Investigation uses hidden cameras -- and Aunt Alice

M. Steager — Mon, 14 Apr 2008 23:59:47 GMT

I have been working in the insurance industry for a number of years...more than I care to admit. My division specializes in variable annuities and mutual funds. My title is Internal Wholesaler, in other words, I deal with brokers that we have selling agreements with and try to get them to sell our products. In my territory I have over 3,000 brokers. The honest and sad truth is that out of those 3,000 there are only a hand full of brokers I would ever trust with my own money. Do I use a broker now? No. Would I ever? I doubt it because a lot of brokers care about one thing...commissions.

Equity Indexed Annuities in my opinion are terrible investments. Representatives selling EIA's (...and yes they still call them EIA's)are not regulated by the NASD or SEC because they are not considered a security. Without that type of regulation, reps can produce whatever marketing materials and pretty much say whatever they want. There are no immediate consequences for their actions. The story also neglected to mention the extremely high commissions these reps are getting paid for EIAs!

My favorite part of the EIA pitch is that EIA's do not cost you anything. That is the biggest B.S. story out there and I hear it a lot from guys that are selling them. The truth is that EIA's cap the amount you can make in the market! For example, the market might yield 12% but your EIA may cap you at 7%. Where did that 5% go? To the insurance company...you've just paid them 5%! It doesn't cost you anything my a$$! That cap could cost you more than if you were in the highest priced variable annuity. I haven't even mentioned the participation rate. Think all of your money is invested...guess again. Typically 70-80% of your money is invested which further reduces your return when the market is up.

Another pitch is that you cannot loose anything. They usually offer a 3% floor, however I think the floor might be less. That's partially true but just as in the Dateline report an EIA rep will glaze over the fact that EIA's have long surrender periods with outrageous penalties.

Do everyone a favor, don't buy an EIA.

Investigation uses hidden cameras -- and Aunt Alice

William Jordan, Laguna Hills, CA — Tue, 15 Apr 2008 00:17:15 GMT

Nice show last night.

As a financial planner (who is also licensed to and does sell annuities) I felt you took a surprisingly non-biased approach. There were a few comments that at least clearly stated "these may be good investments for some people".

I appreciate your efforts to bring to light the deceptive sales practices of some non-professional people. Your show did a good job of showing people the bad side of the industry, and doing so in a way that didn't paint every person offering these products in a bad light.

Well done.

Investigation uses hidden cameras -- and Aunt Alice

V. Florida — Tue, 15 Apr 2008 00:32:19 GMT

It's not the product that's bad, it may be the way that some agents sell them that's bad. I'm a new agent. And I've studied everything!! I'm always studying. Although some agents may sell inappropriate, which should be reported, there are thousands of agents, and only few are that way. It's a matter DISCLOSE DISCLOSE DISCLOSE. A FIXED not variable annuity is a good product, but not for all people, financial situations, or all of a persons life savings. It depends on their goals, their age, if they have money elsewhere with liquidty, there is a multitude of factors. It's up to the agent, to determine if the product is suitable by discussing with the client and fully disclosing everything in order to make a proper determination of suitability. Me personally, i do not look at the commissions. I don't count my commissions. I do not pick the product with the highest commission, i pick the one that best fits my clients needs. I'm not a millionaire, I'm an average earner, which clearly shows that NOT EVERY agent is after the highest commission. The reason for high commissions is because there can be HUGE liability in this business, however, there is no liability if properly sold. I feel FIA's are perfect for some. My mom is in one, and I'm glad, cause now I know what I'll be inheriting.In the past 3 weeks, I met one woman who has lost $600,000 in the market and I met a gentleman who lost close to $550,000! THEY WOULD NOT LOSE THAT IN A FIA! So, I recommend instead of you using your SCARE tactics and entrapment to get ratings, try to EDUCATE the public. Show both sides. Show good agents, or meet with clients who've had their FIA for a couple of years. Additionally, you focused only on 1 particular product with 1 particular company and it's 17 year surrender period. However, that same company has short term annuities. There are IMMEDIATE annuities, what does that mean? NO SURRENDER~! There are 1 year, 3 year, 5 year, 7 year, 9 year, 4 years, 11 years, 13 years, and 17 year annuities that I know of. So, instead of being like every other liberal media source, quit bending the truth, quit bending the information to fit within your storyline, and do some real story telling. Gather the facts. What's funny to me, is you are blaming these agents for not disclosing, for being dishonest or shady, however did you not do the same???????? I really hope that you choose what every insurance agent has to, choose to educate not scare! DUH!

Investigation uses hidden cameras -- and Aunt Alice

TR Malone — Tue, 15 Apr 2008 00:45:09 GMT

I have a question why did you not touch on the bonus monies that are offered. I have been offered as much as 10% to invest in an equity index annuity. I was so hoping you would get the insurance company to explain how they take all the risk and the policy holder gets all the rewards. My financial advisors assure me there is no way a company can give you a 10% bonus for investing and guaranteed rate of return of 7% and share in any uptrend in the stock market above that. If the market goes down you still get your 7%.

Investigation uses hidden cameras -- and Aunt Alice

David Hague Fort Lauderdale Florida — Tue, 15 Apr 2008 01:13:46 GMT

As a licensed insurance agent for over 20 years I found your show to be very misleading. Their are good agents and great annuity products that provide and cover a need of many senior citizens. By not showing both sides of the coin you really hurt your viewers. I have been watching Dateline for many years and have enjoyed many of the shows. I can now see what harm you can do when you don't provide all the relevant information. Stick to catching sexual predators!!

Investigation uses hidden cameras -- and Aunt Alice

Lynn Renaudin, Galveston, Tx. — Tue, 15 Apr 2008 02:33:33 GMT

Thanks for your program exposing this "annuity investment" program for seniors. My mother passed away last May 4th in Escondido, Ca. at age 93. I have paid her few bills & settle her accounts. As her only surviving relative and trustee. She has two of these "bonds", GE & Hancock. I have worked with the nationwide bank that sold them to her for almost a year now, to no avail. They stopped sending me statements, and put a "freeze" on the account, but one of the last statements (6/07)had a balance in excess of 298K. They want a copy of a trust account that was set up in 1995, has been deleted & ammended over a dozen times. They have EVERYTHING except that document, which 3 of her lawyers have informed me, doesn't exhist anymore. The bank will not pay-out the insured principle & want me to pay them $50,000 because the GE stock has dropped. Might there be a class action suit in Ca. on this? I would greatly appreciate any information. Thanks again for your program!

Investigation uses hidden cameras -- and Aunt Alice

Stacy Harris, Nashville, TN — Tue, 15 Apr 2008 02:35:42 GMT

As a journalist, I too, am troubled by Dateline's one-sided reporting. As a diversified investor without heirs, whose only financial goal is securing my own retirement, I am grateful for the bit of information, skimmed away from Chris and company's theatrics, provided.

The disclaimer provided at intervals during the expose- that fixed annuities are an appropriate investment vehicle for some investors- suggests that the repeated theatrics ate up precious time that should have been spent specifying the types of investors for whom fixed annuities are sound choices.

I'm still lacking this information from a disinterested source.

Stacy Harris
Publisher/Executive Editor
Stacy's Music Row Report
www.countrymusicreport.com/Stacyharris.htm

Investigation uses hidden cameras -- and Aunt Alice

M.H.,Salem, Oregon — Tue, 15 Apr 2008 05:30:41 GMT

Once again the press is taking a problem and assuimg ALL insurance sales people are out to take advantage of people. I work in the annuity industry and the annuity company I represent doesn't have an annuity product that has longer than a 7 year surrender charge period. Most of the companies sales are in their 5 year Indexed Annuity product. That being said the product has performed very well. Over 6% from 1999--2007.

Investigation uses hidden cameras -- and Aunt Alice

Gerald and Sybil Cramer — Tue, 15 Apr 2008 12:06:08 GMT

We too have been mislead by an agent from OM financial. My husband and I each put our life saving in annuitys. Now if we withdrew them it will cost us $10,197.00 each. We are 75 years old. unless we lose that money we will never see out money. We were not told about this before we got the annuitys.If some one starts a class action suit we sure wont to be involved

Investigation uses hidden cameras -- and Aunt Alice

Victor D. Gerber Sr. — Tue, 15 Apr 2008 14:02:04 GMT

I have two comments concerning your "Tricks of the Trade" undercover investigation.

1. During your undercover investigation did you find any agents that told the complete, honest story but you chose not to use them as examples because they didn't fit the image you wanted to portray?

2. A portion of the "Tricks of the Trade" segment included several comments from a representative of the State of Minnesota. How many of your viewers realize that before any agent, good or bad, can present any annuity and every aspect of it must be approved by the State Department of Insurance.

In my opinion, a 20% 16 years surrender should be punishable by 6 months in the electric chair! But explain why the holier than thou representative of the State of Minnesota is with the same department that approved the annuity to sell!

How about an in depth reporting of how much money is donated to the state policticians by insurance company's that in turn opens the door for the insurance company to get obscene profits producing policies approved.

Investigation uses hidden cameras -- and Aunt Alice

Doug Kinsey — Tue, 15 Apr 2008 14:30:27 GMT

Dear Chris,
As a partner of a fee-only financial advisory firm in Dayton, OH, (and President of the local Financial Planning Association chapter) I can tell you that you've just scratched the surface regarding unsavory sales practices in the "financial planning" industry / profession. Too bad that virtually anyone can call themselves a financial planner these days. Many who call themselves "financial planners", "financial advisors" or "financial consultants" are nothing more than slick salesman. Additionally, many of the "certified senior advisor -type" certifications being handed out by fly-by-night organizations appear to lend credibility to these salespeople.

However, it's not just "advisors" who go to the client's home who are the danger. Take a close look at the "investment consultants" at bank branches and what they do. Their practices are just as bad, or worse, since they are cloaked in a veil of legitimacy by being in a bank. One of my elderly clients recently went to his bank to discuss a CD that was maturing and was ushered into the "investment consultant's" office where he was encouraged to take the maturing CD funds and buy a deferred variable annuity with the proceeds. He is 91 years old! The primary justification for this type of recommendation is the commission of 5 to 7% that the institution reaps from the sale!

I'll bet if you took a close look at the revenue sources for bank "investment" operations, you'd see that 1/2 to 2/3 of their income is derived from the sales of annuities. And somehow, this type of operation is allowed to call itself an "investment advisory" department or a "wealth management" division.

Talk about a need for closer regulation!

Investigation uses hidden cameras -- and Aunt Alice

James, Palm Springs — Tue, 15 Apr 2008 14:41:15 GMT

Well done...now continue and investigate the dubious practices of the mortage industry, i.e. COUNTRYWIDE, realtors and banks. These are the folks who brought us into the big mess we are in.

Investigation uses hidden cameras -- and Aunt Alice

bob bancroft Peabody MA. — Tue, 15 Apr 2008 14:52:41 GMT

My mother who was 86 yrs. also was conned out of her life savings.The annunities she bought will not mature until she is 96yrs old.
The company she bought them from was American Express which is now called Ameriprise.The amount was 280.000.00.

Investigation uses hidden cameras -- and Aunt Alice

A.T. "Al" Benelli, CFP, FIC — Tue, 15 Apr 2008 14:53:21 GMT

Chris,
Great job os alerting the public.
I am a Certified Financial Planner Practitioner (CFP) and have worked closely for years with many state regualtors... mostly here in PA but also with gentlemen like Joe Borg.
Unfortunately, the problem is far more widespread than anyone realizes and the proliferation of "bogus" credentials, false credibility in the form of "ghost-written" articles and books and the astonishingly high commission rates attached to the "worst" of products is only likely to cause the problem to increase.
I've never been a fan of regulation but the consumer must be protected from these predatory people, pratices and products... especially here in Pennsylvania where they can get away with it most of the time. Our state laws here lack the kind of muscle that exists in other states like Massachusetts.
Anyway... keep up the good work and let's hope that the honest and competent agents in our industry will continue to step up and identify the rotten apples. We definitely know who they are!

Investigation uses hidden cameras -- and Aunt Alice

Gary Vierthaler, Lenexa, Ks — Tue, 15 Apr 2008 15:26:27 GMT

My wife and mother have these annuities from Allianz!! They have had them since 2002. Any suggestions what to do regarding getting out of these?
Thanks

Investigation uses hidden cameras -- and Aunt Alice

Lupe Romero, Auburn, California. — Tue, 15 Apr 2008 16:58:09 GMT

I just saw the program and I'm quite apset about it because I bought one of this annuits and I was not very happy about. Now I'm totaly convince that I have made a mistake. I'm 69 years old and my money is thight for 10 years. My agent did'nt tell me about the penalties for getting my money when I needed it.

Investigation uses hidden cameras -- and Aunt Alice

TT — Tue, 15 Apr 2008 17:18:30 GMT

"Lori Swanson is politically motivated as well"

How do you figure? She's the AG, her job is to look out for the citizens of Minnesota.

Investigation uses hidden cameras -- and Aunt Alice

TT — Tue, 15 Apr 2008 17:35:59 GMT

"By the way, would your aunt be better off in an annuity that protects her money or in your employers stock (GE) that just took a bath? "

No, she'd be better off putting some of her money in a CD, some in an Online savings account, some in a bond mutual fund. Get the hint.....somewhere where she can access it if needed. That's the problem with annuities, alot of these agents are taking 90% of a senior citizens' assets and putting them into a contract where they cant (without penalties) get their money out when needed, because they will need it at some point.

Investigation uses hidden cameras -- and Aunt Alice

MARY FARRISS — Tue, 15 Apr 2008 19:14:09 GMT

PLEASE EVERYONE IN SAN ANTONIO AND THE SURROUNDING AREA, WE HAVE RECEIVED AN INVITATION TO THESE FREE STEAK DINNERS IN NEW BRAUNFELS. THIS IS A SCAM. PLEASE DO NOT ATTEND. THIS IS EXACTLY WHAT WAS ON DATELINE LAST WEEK. THE DINNERS ARE FOR APRIL 22ND AND APRIL 29TH. BE CAREFUL WITH YOUR MONEY

Investigation uses hidden cameras -- and Aunt Alice

Jim Bossaller, Palm Springs, CA — Tue, 15 Apr 2008 19:25:18 GMT

I would like to report a fraud by Chris Hanson on the American People.
The Dateline piece that did well by trying to point out the bad guys and their tactics in the insurance industry, but went on to basically call all EIA’s Known as FIA’s “Fixed Indexed Annuities” bad investments.
The show even made a statement that said “Insurance agents try to say that annuities are as safe as stocks” as if they were not. I would say they are much safer considering almost every customer I have has a Enron, Bear Stearns type horror story or market crash story were they lost 40%-90% of their Ira or investment money.
He made no attempt to point out any of the positives. He did not disclose that everyone gets a 30 day free look, and never pointed out that many people who put their money into FIA’s don’t touch their money for many years, because they rightly did not put every last dollar into one, and thus never have any problems with surrender penalties.

Investigation uses hidden cameras -- and Aunt Alice

Richard Dixon, Clifton, VA — Tue, 15 Apr 2008 19:44:46 GMT

I have an annuity as part of my retirement package. Last week, I lost $9,000 in the stock market. My annuity continued to appreciate. The misinformation and biased presentation on the part of Hansen and his researchers did no service to seniors (CD's can be cashed at any time without penalty? Please!).
Even the two attorney generals seemed ignorant of the scope of investment choices. You started the show with a guy that needed to liguidate and he was going to lose $6000. There were no other specific examples. Was he the reason you did the show?

Investigation uses hidden cameras -- and Aunt Alice

Fred Chalfin, Phoenix, Arizona — Tue, 15 Apr 2008 20:24:12 GMT

The problem is not the product, Fixed Index Annuities. And though failure to disclose the surrender charges can be a problem, there is a much more sinister problem with the SALES process.

It is the failure of the agent to explain the real workings of the investment options. To many reps are either confused, ignorent or apathetic about explaining these options correctly. Like the surrender charges, it can be years before the client discovers the truth.

I am an insurance agent, though I have never sold an EIA/FIA. They can be excellent products for the proper person.

One other thing, the real CRIMINAL act here was to put ALL of the available funds into the annuity, and to use a product with a 16 or 20% charge for a 15 year or 20 year product. I wouldn't have sold that to Methusalah(sp),

Investigation uses hidden cameras -- and Aunt Alice

don smith, norfolk, va — Tue, 15 Apr 2008 21:17:49 GMT

Let's be real the Financial Planners (people who sell
stocks&mutual funds)don't like the ideal of insurance
agents sharing in the 23 trillion dollar that coming the next 10 years. That's why, Index Annuity is getting a bad name. Financial Planners lose more money
on the market than God can count.The open stock market
has no protection for seniors or the average client.
Look how much money is being lost in your 401k's
Why not do a TV report on that?

Investigation uses hidden cameras -- and Aunt Alice

Gene & Joyce, Dayton OH — Tue, 15 Apr 2008 21:43:28 GMT

How do senior citizens find honest brokers who are at least as interested in providing benificial coverage or investments to their customers as they are in receiving a commission? Is there a list of brokers that are good to utilize and/or a list of brokers to avoid? Where does a senior citizen go to find good and honest finanical advice?

Investigation uses hidden cameras -- and Aunt Alice

Celine, Seattle WA — Tue, 15 Apr 2008 22:10:04 GMT

Before all of you people get upset about the Indexed Annuities you bought why don't you look at how your investment has performed? I bought a EIA in March of 2003 and my EIA has returned 5.25%, not bad considering the way the market has been up and down over the years. That on a tax deferred basis as well which equates to around 6.72% if I had put it in a CD. Also, I reviewed my policy and my EIA is out of surrender charges in 2010. Then all of my $ can be taken out.

Investigation uses hidden cameras -- and Aunt Alice

AnnuityMan, Portland Oregon — Tue, 15 Apr 2008 22:29:57 GMT

I am currently a wholesaler for a fixed annuity company that markets an EIA product. I have been in the annuity industry for 15 years and have recruited, trained, and met 100s of brokers.

I've read most of the comments and it's amazing to me the knee jerk reactions people have and the false information that is being told on this blog.

First, most EIA products have a 10% free withdrawal provision available every 12 months. You have $100,000 in the policy, you can take $10,000 out without a penalty. For those of you concerned about some liquidity you may want to review your policy.

Also, I've read several people state that they want to "surrender" their policies. Before you do that, call your insurance carrier and ask them to tell you what the rate of return has been on your policy. You may be pleasantly suprised! Surrendering the policy is a foolish thing to do. Also, many policies have nursing home waivers and 99% have full death benefit riders. If you die, your heirs don't get hit with a surrender charge!!!!

Another comment I'd like to make is that many companies offer 5 and 7 year EIA products that are very consumer oriented with guaranteed return of premium features for example. You put a $100,000 in an EIA the company guarantees you'll get at least $100,000 back.

If you have a cap on your EIA of 10% and let's say the S&P returns 15% the insurance company DOES NOT make a 5% profit as several have stated. COMPLETELY INACCURATE! Insurance companies buy call options. This is why when the S&P tanks you DON'T lose money and your gains are locked in on most EIA contracts!

Investigation uses hidden cameras -- and Aunt Alice

Mike — Tue, 15 Apr 2008 23:14:59 GMT

I am an agent in Arizona and also licensed in many states, I personally think the story had great potential however you missed the point. If you want help with a great story regarding EIA products and abuse, drop me a line. For you information annuities in general are a great products if an agent does the proper suitability study for the client.
Your area of focus "Tricks of the Trade" missed the target a mile...
Truly speaking if you want a great story and the real abuse, let me know.

Investigation uses hidden cameras -- and Aunt Alice

Tracy Taguchi, Torrance, CA — Tue, 15 Apr 2008 23:15:16 GMT

I think your program gave an impression to viewers that all annuities are bad and most insurance agents are trained to manipulate seniors by using scare tactics. I wish you mentioned that Index Annuity is not the only annuity, and that not all annuities have the same kind of long surrender periods and higher-than-10% penalties, and that annuities have great benefits for retirees, and that there are people who invested their retirement savings in annuities and have been happy with the benefits.

Investigation uses hidden cameras -- and Aunt Alice

pj,champaign il — Tue, 15 Apr 2008 23:25:00 GMT

Chris: It is obvious the clients who lost all their money were in variable annuities, not eia's. I have many clients who did in fact lose most of their IRA funds in variable annuities and mutual funds managed by security (SEC) reps. As they aged, their money should have been moved to safer investments. I was able to place them in safe fixed and/or eia's and they are quite happy. They knew the surrender charges upfront and the length of the contracts, which vary depending on the type of annuity they decide upon. Most stock brokers or registered reps do not like eia's because many individuals have transferred funds from accounts where they had lost money. You failed to mention that an agent receives an initial commission paid by the insurance company, not the client at the point of sale, however, a registered rep/stock broker, receives initial commission, usually a monthly fee for having the account and a back-end commission. My clients have mostly been referrals by other clients or their own families who are pleased by my honest treatment. I treat my clients the same way I want my parents to be treated by a professional. Please show both sides to this important story.

Investigation uses hidden cameras -- and Aunt Alice

terry wyomissing pa — Tue, 15 Apr 2008 23:37:49 GMT

what idiot said these do not pay high commission most are 7 to 11%. i know i sell them

Investigation uses hidden cameras -- and Aunt Alice

Richard, Texas — Wed, 16 Apr 2008 01:09:08 GMT

I really enjoyed the show on EIA's. The agent that tried to sell me one of those told me he would fly me to Miami for a weekend in order to fill out all the paper work there. He said if I signed in Florida, I would avoud all surrender charges since they are illegal in Florida. Can that be true? Luckily, I passed on his offer.

Investigation uses hidden cameras -- and Aunt Alice

Charles and Peggy Long, Beaumont, Texas — Wed, 16 Apr 2008 02:22:56 GMT

Chris, I retired in August 07. In August my husband and I received an invitation to attend an Educational Seminar for Estate Planning. We were given a free meal and the speaker said the very same things that the speakers said on your program. We were very interested, so the speaker came to our home that afternoon, and we wrote a check for the "Trust" and a check for the lawyer. He was very nice and we were very comfortable with him. He set up an appointment for one of his representitives to come to our home and explain the details of the "Trust" and show us how to fill out the book.
10/10/07 Robert Mercurio arrived and began to tell us the details and to get us to sign papers for the "Trust".I disclosed the amout I had in my TDAs. He began to convince me why I would be safer with my money in their Index Annuity program with Aviva. I signed a paper for my money to be moved from Mutal of America to Aviva. He continued to try to convince me to move my other account to them, but I was beginning to feel uncomfortable, so I refused. He was also trying to sell us life insurance and long term insurance. We declined, if was obvious he was becoming aggravated with us, so he began to pack up his papers and stuff. In his rush to leave, he left his notary stamper. We found the stamper a few hours later and I was feeling very uncomfortable with my decision to move my TDA. I called his cell phone #713-416-2110. He did not answer, so, I left a message tellin him I had chaned my mind about the TDA and that he had left his motary stamper. I asked him to please call me back.
10/11/07 My husband called Robert and talked with him. My husband and asked him if he had gotten my message, he asid he had not checked his messages. My husband told him that I had decided against rolling my TDA over into their Index Annuity with AvivaLife and Annuity, so destroy that signed paper. Robert said "I will take care of it". We arranged for him to pick up his notary stamper on Friday 10/12/07, he did pick it up, we had to go out of town so we left it where he could find it.
10/31/07 I received a statement fro Mutal of America showing Total Withdrawn Rollover/Transfer on 10/23/07,eleven days after he (Robert) said he would take care of the signed paper. I contacted Mutal of America to check my account and was shocked. I called Aviva immediately-no answer.
11/03/07 I called Fannie Toe my representative for Mutal of America. She told me they had received my signed paper and they didn't question it since it was my signature. She told me the steps to cancel this move and to have it returned to my Mutal of America account.
11/13/07 The check was deposited back into my Mutual of Ameica account.
11/14/07 Tom Ferguson from CLA came to our house to deliver ou "Trust" booklet. My husband had told CLA he didn't want Robert back in our house. Tom told us he had 30 something years experience in insurance. At first he explained the steps we needed to do for our "Trust". Then he began to try to talk me into again signing my Mutal of America over to them Telling me how much Mutal of America would charge me for sercie, back end load, slinding scale or drop off
costs. He even dialed Mutal of America on his cell phone and gave me questions to ask them, my husband asked "Why are we doing this, we have made our decision?" Immediately he picked up his belongings and left in an obviously angry manner.
After seeing your program on Sunday 4/13/08, we wanted to share what is going on here also.

Investigation uses hidden cameras -- and Aunt Alice

Ann M. Connelly, Birmingham, AL 35243 — Wed, 16 Apr 2008 03:33:47 GMT

Chris,
Just viewed your story on annuities. People called me
to tell me to watch it because they knew of my husband's Cousin Alice's situation. I believe she was really taken advantage of in White Plains, NY.
She was 79 years old and in poor health. The seller
of her annuity came to her church and signed her up.
It is irrevocable, non-transferable, and has no
surrender option. She has no family in NY and has never been married. We brought her to Birmingham, AL
because of poor health and placed her in an assisted
living situation. She only had her social security
and the small payout from her annuity--not nearly
enough to live on. We tried to access her money for
her care and medical needs, but to no avail. The
company would not allow this. Therefore, for a little over a year, we borrowed against our own home,
withdrew funds from our own IRA, and borrowed from the
credit union to cover her expenses while we tried
unsuccessfully to unlock her only funds. She is now 82years old, and has now had to move into a nursing home. We had to make Alabama Medicaid beneficiary of her annuity. We will never recover what we have paid out. We were not in a financial position to sue, but I wanted to. It was a crime for this person to lock up a 79 year old's money. He stated that he had fully explained everything to Alice. Shame on him. May he not sleep well for the rest of his life. I'm
sure Cousin Alice is only one of many. Thanks for
making seniors aware of the pitfalls of annuities.

Investigation uses hidden cameras -- and Aunt Alice

concerned, RI — Wed, 16 Apr 2008 17:12:33 GMT

Apparently this happens all over, even in little RI. Someone should check out ltc consulting of NE out of Bristol RI. The owner there prides himself on specializing in seniors because it's easy money. Disgusting!!

Investigation uses hidden cameras -- and Aunt Alice

John Craig — Wed, 16 Apr 2008 17:20:38 GMT

Why don't you people take some responsibility for your actions? You should try reading a contract before you sign it.

Investigation uses hidden cameras -- and Aunt Alice

Bill Hahn, Grand Rapids, MI — Wed, 16 Apr 2008 18:31:48 GMT

Chris - I loved your investigation into the marginally (and sometimes nonexistent) ethical practices of annuity salespeople. There are a couple of points that I would like to make in conjunction with the information you presented. There are some Indexed Annuities that have principal guarantees, generous liquidity options, and reasonable contract length (7 years or less). Additionally, certificates of deposit are not principal guaranteed either. It is possible to have the penalty applied to the initial principal if the funds withdrawn exceed the amount of the interest accrued.

Investigation uses hidden cameras -- and Aunt Alice

Curtis, Hot Springs, AR — Wed, 16 Apr 2008 19:10:39 GMT

Ok, let's get some things straight! First Indexed annuties are NOT regulated by the SEC and are not considered investment vehicles. Yet these insurance agents present them as being in the market with out market risk. Why do agents sale them? Commisions as high as 10%, most Variable Annuites higherst payout is 7%, contrary to an earlier post that Indexed Annuities have lower commisions is untrue. The insurance agent, unlike a financial advisor, do not have to meet suitability requirememtns, and are in no way overseen by the SEC.

What really concerns me is the way they are portrayed as investments. Yet your returns are capped at a certain % along with only having 70-80% of index gains credited to the account. Dividends are not re invested into the account either, the insurance company keep those!

The fees are extremley high compared to the very limited potential for actual gain.

Index annuities minimum guarntees are usually set at 3%, for the first year, then the company has the discretion to change that to as low as 1% any time after the first year.

A variable annuity allows you full participation in the market, no caps! And offers riders to protect your initial investment.

The bottom line is if you are going to invest your retirement saving you should seek the advice of a licensed financial advisor, not an insurance agent.

Investigation uses hidden cameras -- and Aunt Alice

RD — Thu, 17 Apr 2008 14:43:08 GMT

InsuranceNewsNet Responds to Flaws in Dateline NBC Report
http://www.insurancenewsnet.com/article.asp?n=1&id=93344

April 16, 2008

Dear Dateline,

In response to the April 13th edition of Dateline “Tricks of the Trade” about unsuitable “Equity Indexed Annuity” sales,InsuranceNewsNet Magazine (INN ), a leading trade publication, would like to respond to your clear lack of journalistic objectivity and integrity as a news organization.

While we agree that there are a few insurance agents practicing deceptive, unscrupulous sales practices with “Equity Indexed Annuities,” there were far too many important facts about annuities as a whole that were left unexplained to the viewers.

At the heart of the matter is your show’s completely biased, one-sided view of the facts, from two of the biggest opponents of what are now called Indexed Annuities (IAs) – never once did Chris Hansen provide an opposing viewpoint in support of IAs.

Your primary objection to IAs was surrender charges, yet you neglected to mention that IAs aren’t the only type of annuity with surrender charges. What about traditional fixed and variable annuities, some of which contain similar lengths of surrender periods? No mention of these products was included in the program. Dateline also failed to mention that there are plenty of IAs on the market today that contain surrender charges as little as one year, yet instead focused on a 16-year surrender charge product that even contained a 10% premium bonus, an important benefit to the client.

The fact is that the amount of complaints against indexed annuity agents and providers was grossly exaggerated in your program. Attorney General Lori Swanson’s comments that these unscrupulous sales are happening on a large scale is unsubstantiated. According to the National Association of Insurance Commissioners, whose mission is to protect the public interest, there have been only 35 complaints nationally in 2008 compared to more than 1200 complaints against the handling of other life insurance policies. IAs had very few complaints – according to the NAIC. The point is that Dateline, like other mainstream media, has blown the situation out of proportion to the detriment of your viewers.

Like any other sales field, there will be any number of salespeople pulling the wool over people’s eyes. As a leading authority on life and annuity news, INN strongly opposes fraudulent sales tactics. But by exposing these few agents, without letting the public know that indexed annuities have one of the smallest complaint ratios in the insurance industry is just plain-old, bad reporting. Even one factual tidbit would have made this Dateline episode gain credibility.

In response to AG Lori Swanson condemning the practices of agents in the video, it should be stated that Swanson is part of a state system that approves the very same product which she is condemning.

The documented truth is that for thousands of consumers, indexed annuities are a perfectly sound, secure and successful vehicle. In the end, your story could do more harm than good because many owners of indexed annuities may start to wonder about the strength of their insurance product. Meanwhile, the financial markets continue to be volatile. Stocks and mutual funds continue to suffer and yet the insurance industry is being pegged for squeezing money out of the pockets of seniors. What about the stocks and fund investment losses that seniors experience on a daily basis?

Here are some additional facts that are important for your viewers to understand:

In 2005, there was only one complaint for every $260,000,000 in premium, or .1% of all premium (Source: NAIC closed complaint files 2006, Advantage Compendium).
According to NAFA, The NAIC Suitability Model Act, which protects consumers through rigorous standards, has been enacted in states with approximately 87% of all annuity business. Carriers are heavily monitoring and reviewing indexed annuity sales as a result.
Isn’t the fact that Dateline colluded with the Alabama State Securities Regulators to get false licenses issued unethical? This report was not a government-sanctioned piece.
Again, INN agrees that as with all industries, fraudulent sales practices certainly occur, but in the grand scope of all annuity sales, IA complaints are among the fewest. The benefits of indexed annuities and the growth potential and security they offer policyholders were never addressed.

Dateline has revealed itself to be tabloid journalism, not balanced investigative reporting. In the future, INN , in its humble opinion, recommends that Dateline provide various viewpoints. In the end, your show did exactly what it decried in the actions of the agents. It ended up pulling the wool over its viewer’s eyes. Now who is deceptive?

Rob Billingham
Executive Editor
InsuranceNewsNet Magazine
rob@insurancenewsnet.com

Investigation uses hidden cameras -- and Aunt Alice

Gloria Oxendine, Huntersville, North Carolina — Thu, 17 Apr 2008 19:29:12 GMT

I applaud dateline and Chris Hanson. My husband who is not very educated in these matters has been blessed to have a good head on his shoulders to save and has worked very hard for what he has. He was led to believe that there would not be all of these penalties if he withdrew early, however we now know that he will never get what he put into these index annuities. I would like to get in touch with the president of Allianz ( he says he is going to help those 70 and over) what about someone like my husband who is not educated, not well and is only 62 years old. Doesn't he deserve help?? Thanks again Chris.

Investigation uses hidden cameras -- and Aunt Alice

Dana - Glenside, PA — Thu, 17 Apr 2008 19:47:14 GMT

The real problem is that the NASD and the SEC haven't decided who has final jurisdiction over these types of products since the money is not directly invested - so no one is truly regulating them to the degree that they need it and people trying to line their pockets are taking advantage of that situation all the while giving a bad rep to those of us who are in it for the right reasons and sell these products only when it's appropriate. The only exam these agents have to pass to sell these products might as well be a color-by-numbers placemat at Friendly's.

A responsible position for the media to have taken would have been to investigate these underlying problems and possibly lead to changes in legislation. Should you choose to do so, get a test and regulatory agency established for people to sell mortgages too!

Since the article was discussing misleading information, I think it is important to also point out that the commentors were providing misleading alternatives. Call a few local banks in your area and ask about their CD policies. Many of the smaller local banks will give you your principal back if you withdraw early but many of the larger ones will keep up to half of your principal in the event of an early withdraw. Not to mention with CDs you have access to your money maybe 7 or 10 days every time it comes due but with a properly applied annuity product, you can usually access 10% of the balance 365 days a year without any kind of penalty. Index annuities are attractive for their guarantee of principal but typically, if I find that it is the best fit for a client, it comes coupled with another type of secure short-term investment as well. Two and sometimes three products together can help stretch a [retired] couples last money as far as possible.

Investigation uses hidden cameras -- and Aunt Alice

Anne Livingston — Thu, 17 Apr 2008 23:40:08 GMT

Dear Chris Hansen:
I find myself very disappointed in your biased report. As I sat watching the program, I thought you tried to smear an entire industry because of a few "bad apples". How many honest agents came to your "sting house" that were never shown on the program because they didn't fit your agenda? By the way, what was your agenda? You accuse the insurance industry of using scare tactics. And Dateline doesn't use scare tactics? The name alone is a scare tactic. Shame on you! I expected better of you. Once again Dateline has used the actions of a few in the attempt to make an entire group look bad. It should be obvious that the elderly need to be protected from unscrupulous agents. That could also be said about unscrupulous doctors, dentists, lawyers, bankers, religious leaders, or any other professional group. I got food poisoning at a restaurant once. I didn't stop eating at restaurants after that. As John Stossel would say, "GIVE ME A BREAK!"

Investigation uses hidden cameras -- and Aunt Alice

Smalltown, IA — Fri, 18 Apr 2008 00:33:10 GMT

My little sister and her husband who are in their 20's got suckered into putting all their savings into an annunity. They told their insurance agent they needed it for a down payment on a house and such within the next couple years. He also sold them each a million dollar insurance policy and they do not own a house or have children yet. 9 months later, they want to take the money out (he failed to tell them about the horrible surrender fees) and now they only have about $14,000 out of a $33,000 investment. This guy should go to jail. Who the heck does this to a young couple starting out who worked extremely hard to save that money. Pretty much ate roman noodles for the year they saved that money up.

Investigation uses hidden cameras -- and Aunt Alice

Robert F Reed — Fri, 18 Apr 2008 21:41:53 GMT

your show did more of a dis service to seniors and everyone else that was watching when you gave incorrect informatio on CD interst. you stated that a person will never lose more than the interest whenwithdrawing money early from a CD. I found out the hardway that if the CD hasn't earned enough interest to pay the penalty , the bank takes from the principal
I checked around and found this to be true with all the FDIC insured banks I know of

Investigation uses hidden cameras -- and Aunt Alice

Marilyn Wilson, Swartz Creek, MI — Sat, 19 Apr 2008 01:19:08 GMT

Chris-Good timing on "Tricks&Trade." I just got my IEA (15 yr 22% surrender & NO INTEREST for 1 yr on 54K from Midland Natl Life Ins.Co. in Iowa. I have tried to get monies returned w/much correspondence to agent, MNL & Office of Financial & Insurance Service (MI) IFIC, which did very little other than to tell us to use the court system. However, several clients have received their funds, but I have been refused. And, we had the agent's seminar/booklet & paper showing his 8% marking next to my MNL portfolio amount. That was the amt. we were to expect annually. The ins. company's job is to deflect, slant the facts, intimidate & make the problems, including cancelling our agent with the company, go away. Said agent has also been cancelld with our state. (I see you are from Bloomfield Hills, Michigan). Please do more on this subject, encourage clients to contact their state offices, such as OFIC, and do a follow-up program. Thank you.

Investigation uses hidden cameras -- and Aunt Alice

John Shore, Arcadia, SC — Sat, 19 Apr 2008 01:32:01 GMT

Dear Mr. Hansen, As a resendent of SC I wish the rest of the country knew about the resent court case of our state treasure being caught with a half a kilo of cocane. Being from a promanate family, he only received ten months in jail. The local news reported it breifly, then pushed it under the rug. If a regular person was caught with only a gram, they would get 10 years.

Investigation uses hidden cameras -- and Aunt Alice

Wendy Brown — Tue, 22 Apr 2008 00:28:38 GMT

To whom do you report index annuity senior abuse? I have a friend who had a salesmen advise her to put everything, including her house, into an indexed annuity. She will need to live to age 94 before she can access her fund without penalty. How can she have the funds again in a timely manner? W. Brown, San Diego, CA

Investigation uses hidden cameras -- and Aunt Alice

Larry Smith, Hilliard, Ohio — Wed, 23 Apr 2008 21:11:23 GMT

While leaving money in an annuity for years DOES avoid the unconscionable high surrender charges, the unsuspecting annuity holder will in most cases fall victim to yet another unnecessary, savings-robbing trap, that being EXCESSIVE ONGOING ANNUAL FEES!! These go by various (intentionally) confusing names depending on the particular company and annuity product, and are typically buried in the (intentionally) fine-print mumbo jumbo wording of the annuity contract, but COMMONLY end up skimming away 2-3% ANNUALLY (year after year after year, for as long as one owns the darned thing) of whatever your account balance is. Compare this with the industry-wide average for no-load mutual funds of roughly 1.35% (total annual expenses), and the fact that MANY superior-performing funds are available with annual expenses of well under 1.00% (and under 0.25% for market-matching index funds). Why accept 2% less annual return for any given level of market risk?!

And I suppose the annuity sharks (er, salespersons) seldom point out that the guarantee against suffering market loss frequently comes at the price of having a "cap" put on the percentage of market gain your account will be credited with during the (statistically more frequent) good stock market years...with the formula used calculated in favor of the insurance company (surprise, surprise).

Annuities are investment products designed primarily to make maximum profit for the insurance companies and their salespeople, NOT for you the investor. Be savy and don't waste your time and hard-earned money on them. While the annuity salespeople may reluctantly acknowledge that "annuities are not suitable for everybody", in reality they are OPTIMUM investment vehicles for almost noone. Seek your financial/investment counsel only from FEE-ONLY FINANCIAL PLANNERS having the "CFP" (Certified Financial Planner) license, the most ethically and educationally rigorous in the industry. With them, you pay only for their time and expert coaching/assistance/money managing - they don't receive commissions or benefit from your choosing one investment over another. Best of luck.

Investigation uses hidden cameras -- and Aunt Alice

Wilma W. — Sun, 27 Apr 2008 00:02:14 GMT

Chris -- My sister and I saw your April 13, 2008 report on Index Annuity fraud and we want you to know that we too were conned with these annuities. Our agents must have attended the same kind of "agent school for scare tactics" as you visited on your show. Our agents use a different angle, they said they get 80 per cent of their business from funeral homes, approaching people when they are making arrangements for their spouse, or from seniors who have had to admit their spouse to a nursing home. This we only found out after the fact when we questioned their integrity. Please don't let this issue rest, please continue to investigate and expose these frauds and put them out of business. We sent a report to our state insurance commissioner and were told ours was the only report and as sisters we couldn't vouch for each other. Can you tell us what else we might try to help us get our money back. Our annuities are for 15 yrs. with a 25 per cent surrender fee.

Investigation uses hidden cameras -- and Aunt Alice

Ruth Napier Walled Lake, Mi. — Wed, 21 May 2008 21:51:31 GMT

Well...I'm sure the people that sell annuities don't want to get a bad reputation. God bless you if you are doing right. But lets get one thing straight. You folks are in it for the money. That's what your business is about. Okay?

Let me tell you about my experience. My husband was diagnosed with lung cancer and had to retire early. He moved his 401K (rollover IRA) to an investment retirement place and trusted the agent to do right by us. He put our money in a variable annuity. My husband died about a year later. The account was them put in my name. I never heard nothing from the advisor about what my options were. He never told me anything I could do and I didn't know either. But about 6 months after my husband was gone he called me one day and asked if he could put half of my IRA in different stocks. He said he would turn my money into a large amount and to just trust him. This man had a way of talking that anyone would believe him. I said yes reluctingly.

Things started going wrong and I lost over 13,000.00 before I moved it. I didn't know much at the time, but I was studying and learning. I moved it to the bank to keep what was left safe. I could have left this annuity when my husband died but I didn't know that! He never told me! The contract ended upon his death.

I finally got a clue what was going on and faced this advisor with the truth and he got mad at me and told me to take my money and go. So I did. He wouldn't tell me what the fees were I was paying. It had different fees I finally found out when I called the insurance company myself. I asked him how he was being paid and he just ho-hummed around and muttered a few words that it would be handled by the company.

I was and am a widow alone with no one to help me with this. So I made appointments and talked to many (10 or more) advisors who tried to scare me and tell me I had made bad mistakes, which I had, and then try to get me to do the same thing over again in their company. I was talked mean to by some of them and put down for my mistakes and I finally said that's it, I'll move it to the bank and stay there till I know what to do. I'm still there.

Do these financial advisors think because we are over 60 that we are dumb and they can treat us like we are a nobody? What would make anyone talk mean to another human being like that who is in grief after losing their spouse of over 40 years? MONEY HONEY! That's it!

I think it's a dirty shame that a person works all their life and saves what they can, then to have finacial advisors try to take what that person has to live out the rest of their life with. How do they sleep at night knowing they had taken advantage of some widow still grieving for the loss of her husband. That was where I was at.

So this is what a financial advisor did to me. I am learning about how to manage my own money and will be my own advisor. Unless you have alzheimers, you can to. It's not as hard as you think and this computer is a world of information. Start reading about investments on here, and watch Suzy Orman every Saturday night on CNBC at 9:00 Eastern time. This is not a commercial for her, it's to let you know where you can learn how to manage your own money and you can write her and ask questions to. No one cares about your money as much as you do. So don't you believe it if someone tells you they do.

I will never believe a financial advisors word again after what they have done and said to me. I learned about them the hard way. It's all about the money and don't any of you seniors ever forget that.

Investigation uses hidden cameras -- and Aunt Alice

James M. Taylor Truth or Consequences, N.M. 87901 — Sun, 08 Jun 2008 20:52:26 GMT

I wish I could have had your presentation when I retired. I am victim of exactly the same scam your hidden cameras caught. The agent was an Ashfin Ensfadarin of Durango, Colorado, representing Jackson National. They got me into a 12 yr annuity with my entire retirement savings, not completely explaining withdrawal penalties, and not explaining at all fees assessed against the percentage I was supposed to get in relation being indexed with the SP500. I've written letters to Jackson Nat'l and in essence been called a liar by that company. There ought to be a law against these scams, and penalties for the companies and agents that promote them. Darn good article on your part.

Investigation uses hidden cameras -- and Aunt Alice

Jim & Flo Jones — Thu, 17 Jul 2008 20:46:57 GMT

We have just been made aware of this show and I am not able to download the video and have it play properly, can you run the show again soon and advertise it often? We bought into this annuity plan and are part of the class action suit in California even tho we live in Alabama. I won't say we were lied to but we didn't hear the whole truth, either. Please show this episode again and soon.
Thanks, The Jones family in Tallassee, Alabama

Investigation uses hidden cameras -- and Aunt Alice

chaim lowenstein, Brooklyn ,NY — Fri, 25 Jul 2008 03:29:54 GMT

I am writing this letter in reference to a situation that has disrupted my professional life and has given me much personal stress. I feel it is my civil duty to warn everyone just how easy it was for someone to take control of my GoDaddy.com account and how painstaking hard it has been for me to regain rightful access to this account.

Everyone knows about identity theft and cyber fraud. It would surprise me to meet anyone who has not read news stories about hackers infiltrating security networks and gaining personal information that can destroy someone’s credit history or even their reputation. I have always been wary of identity theft and trusted the companies I have conducted business with to be just as careful and secure with their investments. This was until my trust with GoDaddy.com was destroyed on a Friday when I received notification on my Blackberry that my account status had changed over to a former business partner. I immediately called GoDaddy.com and discussed the account situation with Steve in customer service and Ryan in technical service and they rectified the situation by giving me control over the account again. I logged in and realized that my former business partner deleted the majority of my businesses. Luckily, I had everything backed up on my hard drive and was able to change everything back to normal within a few minutes. After I was done with this process, I logged out.

Unbeknownst to me and the customer service technician who initially gave me back control of my account, my former business partner was still logged in when I fixed everything he messed up. He waited for me to log off before destroying everything I fixed, including changing my user information to ensure that I could not log back on. The next day, I attempted to log on and, to my dismay, I realized that my profile had been hijacked yet again. I immediately called GoDaddy.com and explained the entire situation to the customer service department, hoping that they could easily resolve the situation just as they had the previous evening, but instead, they treated me with suspicion. They asked for various forms of identification to prove that I was the true owner of the account, which I completely understand and had no problem giving them. However, it became obvious that the specific information I gave them would not be enough to regain access to my account. In fact, they are now requiring me to fax copies of my driver’s license and social security card to a random fax number. I am utterly frustrated because I gave them information that no one else on the account can give, yet it is still not enough to regain access to my businesses. The information they want is starting to get very personal and I am beginning to feel uncomfortable handing personal information over to a company whose security is obviously very lax. I would like to know how my former business partner obtained my information and has access to my account when it is so difficult for me to prove my identity to GoDaddy.com’s customer service department.

As of right now, I still have yet to gain access to my account. My business websites are no longer operating and I do not have domain access of my email accounts. I feel as if I was pick pocketed on the street and neither the police nor do my credit card companies believe that my wallet was stolen. I feel helpless and I do not want any one else to ever feel this way. You never truly know how good your business relationships are until you have a problem.