Arizona seniors lost millions in annuity fees, lawsuits say

Hundreds of Arizona senior citizens cashed in their retirement investments and paid millions of dollars in unnecessary fees, according to lawsuits accusing a Scottsdale-based estate-planning company of taking advantage of vulnerable clients.

Federal and state court lawsuits claim officials with National Future Benefits Unlimited generated large commissions by scaring and misleading elderly clients into bailing out of existing annuities and buying new ones. The moves left the clients paying steep surrender fees to insurance companies and facing potential tax liabilities, according to the lawsuits.

Annuities, sold by insurance companies and meant to serve as long-term investments, are growing ever more popular as companies attempt to tap the burgeoning population of retirees with offers of lucrative interest rates and guaranteed incomes for life.

In one of the lawsuits, an insurance company is accusing National Future Benefits of systematically targeting clients to cash out their annuities; in the other, an elderly Phoenix couple contend they were defrauded out of most of their assets.

National Future Benefits President Randall Jaeger denies any wrongdoing. He said that facts in both lawsuits have been twisted to make his company look bad. Jaeger said in cases where his clients were hit with fees,Discount Tiffany&Co Bracelet for sale bonuses and improved interest rates from new products more than covered the costs, so that no client lost money.Wholesale Cheap Hiphop Necklace Sale Online

"I know how it looks," Jaeger said of the lawsuits. "I'm upset over how it was twisted and turned . . . how it was made to look like I was trying to take (clients') money."

Financial experts say the allegations in the two cases underscore the pitfalls that can be associated with buying annuities and the care seniors need to take when considering such an investment.Wholesale replica Ralph Lauren Polo Scarf Online Annuities can carry substantial fees and tax penalties for early withdrawal.

In addition to facing the two lawsuits alleging fraud and illegal activity, National Future Benefits has a history of state regulatory complaints and this year was investigated by Arizona Adult Protective Services. The lawsuit involving the elderly couple led to an $866,000 settlement this year and triggered an elder-abuse claim filed with the Arizona Attorney General's Office.

The Attorney General's Office would not discuss whether it opened an investigation into the claim.

But the Arizona Department of Insurance, which oversees the sale of annuities, renewed Jaeger's insurance license in July without raising any red flags.

Department officials acknowledged last week that they were unaware of allegations against Jaeger until contacted by The Arizona Republic. Now, a department spokeswoman said it has launched an investigation into whether Jaeger made false statements when he renewed his license.

Department spokeswoman Erin Klug said a review of Jaeger's license application found that he failed to report the lawsuits.Discount Chanel Earrings sale The renewal form requires disclosure of any pending cases alleging fraud, coercion or dishonest business practices; Jaeger reported there was none.

Klug said the allegations against Jaeger are "concerning" and that Insurance Department investigators are scrutinizing the lawsuits.

Jaeger defended his company's record as exemplary.Special Offer Christian Louboution Shoes Online He said the failure to report the lawsuits on his license application was a clerical error made by another employee and promised quick correction.

"The last thing I would do is jeopardize my license," he said.