Allianz Life Insurance Sales Fraud
The use of deceptive sales tactics for deferred annuities is a growing problem in California. Seniors are easy prey because they have more assets that can easily be shifted into these products. When the stock market is volatile, annuities are often marketed to seniors as a safe haven for their money that is guaranteed to grow over time. This is not necessarily true and the penalties for surrendering the annuities can be extremely high and make their investment vulnerable.
In general, the lawsuits handled by the Evans Law Firm allege that deferred annuities are an inappropriate investment for the elderly due to the high surrender fees, undisclosed costs and fees and the meager returns they provide. They present a substantial risk of loss because they are a long-term investment and highly illiquid. Should a senior need the money tied up in a deferred annuity to pay for health or other age-related costs, they could face significant surrender penalties that deplete their assets.
Allianz is a European insurance company that is one of the largest providers of annuities and other insurance products to senior citizens in the United States. Since 2005, Allianz has faced several class action lawsuits alleging that the company fraudulently marketed some of its most popular annuities products.
If you have purchased a deferred annuity from Allianz Life Insurance Company of North America (ALLIANZ) you may be eligible to participate in a class action suit.
A district court in Minnesota certified a class of over 400,000 purchasers of certain Allianz annuities since the year 2000. Among the annuities in question are BonusMaxxx, BonusMaxxx Elite, BonusDex, BonusDex Elite, 10% Bonus PowerDex Elite, MasterDex 10, and the InfiDex 10. The plaintiffs’ complaint alleged that Allianz fraudulently marketed these and other annuity products as providing an “up-front” or “immediate” bonus, when the bonus was in fact not fully available until years after the products were purchased.
The suit alleged that Allianz violated Minnesota consumer protection laws by enticing prospective and existing policy holders to purchase two-tiered equity-index annuities by falsely advertising that the “up-front” bonuses would overcome any investment losses, surrender penalties, and income taxes incurred on any previous investments. Many of these promises regarding up front bonuses were allegedly printed in Allianz marketing materials. The case went to trial and Allianz prevailed at trial.
In 2006, a California district court has recently certified a separate class action consisting of over 200,000 California seniors. This lawsuit alleges that Allianz sold deferred annuities to elderly class members through a standardized sales program premised upon three alleged misrepresentations: that Allianz’s annuities carried “no sales charges,” offered an “immediate” up-front bonus, and would pay “full value” if certain deferral requirements were met. The plaintiffs allege that these three misleading statements were contained in sales brochures provided to prospective clients by Allianz agents. According to the complaint, these descriptions were false and misleading, since Allianz paid hefty commissions to its sales agents that were allegedly recouped from consumers by lowering the yield of the consumers’ annuities. Plaintiffs also claim that they could not receive the “full value” of their annuity, as marketed, unless it remained in deferral for at least five years, with payout taken over at least ten years.
The California plaintiffs filed their claims for relief based on the Rackateer Influenced and Corrupt Organization Act (RICO); elder abuse under the California Welfare & Institutions Code; unlawful, unfair, and fraudulent business practices under California’s Unfair Competition Law; false advertising under California’s False Advertising Law; breach of fiduciary duty; and unjust enrichment.
Certain Allianz deferred annuity products included (but are not limited to):
- Master Dex 10
- Master Dex 5
- Flex Dex
- Bonus Dex
- Flexdex MC
- Power Dex
- Power 7 Annuity
- Bonus Maxx
- Power Rate
If you or a family member were sold a deferred annuity from Allianz Life Insurance Company of North America or another insurance company and you want to investigate the claims, please contact attorney, Ingrid-Evans.