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May 16, 2017 by |

Alameda County and California Annuity Attorneys: Annuity Fraud

ATTORNEY NEWSLETTER

Annuity Fraud: A Widespread Problem

Beware of Annuity Fraud Scams

Annuity agents target seniors. It’s a simple fact. Another simple fact: many annuity agents cannot be trusted. A recent case provides a clear example. There, over years of operation, two fraudulent agents bilked seniors out of $11 million in hard-earned retirement savings and put the seniors into unsuitable annuities. Thanks to the state’s insurance department, the defrauded seniors stand to get their money back with interest. Not all elderly annuity holders are so fortunate.

An annuity agent’s sales pitch always centers around income security and, in an era of low bank interest rates, the promise of higher returns. Seniors are particularly vulnerable since their earned income days are over and the Social Security and retirement incomes fixed regardless of rising prices. The annuity agent’s promises are often irresistible. Consider that just two agents were able to defraud 77 victims in a 14 county-wide area and then multiply that over the nation. You get an idea of the enormity of the problem.

Most of the annuity products agents peddle are unsuitable for seniors to begin with. Long maturities, steep early withdrawal (“surrender”) penalties, and inaccessibility of funds just don’t make sense for older people. But agents are often greedy for large commissions; annuity and life insurance commissions are very high. And frankly, annuity agents are sometimes unqualified in complex contracts and how they play out over length policy periods. Taken altogether this is a recipe for fraud and disastrous economic loss – for the senior. Allow the lesson of just this one scam to sink in. It can – and does – happen anywhere in Alameda County and throughout California.

Proceed with Caution


Be wary of annuities; they are complex and dangerous. Read articles such as the one on the recent scam. Resist high-pressured sales pitches. Refuse quick decisions. Consult an independent financial consultant or counsel who is not compensated by sales commissions. Take your time and get professional help.

Some of the major annuity and life insurance providers in California are:

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