August 24, 2009

CFO SINK push for 'alligator teeth' in senior scam laws

ST. PETERSBURG - Florida CFO Alex Sink today announced her continued pursuit of stronger penalties against unscrupulous insurance agents who defraud senior investors. CFO Sink made the announcement at a press conference today before meeting with the Florida Council on Aging, and was joined in her call for action by Florida seniors who have been victims of such scams and Lori Parham, AARP Florida State Director and part of CFO Sink’s Safeguard our Seniors Task Force.

“After hundreds of investigations and thousands of complaints, it’s time that the State of Florida finally cracks down on these scammers,” said CFO Alex Sink. “Last year we had a bill that would have put some ‘alligator teeth’ into the law, but one House Committee refused to act— that’s simply not acceptable to the victims and it’s not acceptable to me.”

CFO Sink first called for better financial protections for seniors after her department heard from hundreds of seniors who were convinced to liquidate annuities, CDs, stocks and savings accounts to fund new annuities, only to discover these actions robbed them of their savings.  In the past six years, her department has fielded more than 2,400 calls and complaints from consumers regarding this type of fraud.  

“I commend CFO Sink for her continued commitment to safeguarding Florida seniors from these devastating financial crimes,” said Lori Parham, AARP State Director. “As part of her Safeguard our Seniors Task Force, I know firsthand that Florida seniors aren’t properly protected from financial fraud under current law.”

CFO Sink created a Safeguard our Seniors Task Force last year to examine and recommend solutions to better protect Florida seniors against financial fraud.  This year, CFO Sink teamed up with key lawmakers to push legislation that increases the penalty for agents who defraud senior investors to a third degree felony and establishes better disclosures and protections upfront for seniors who invest in these products. The legislation was approved unanimously by the Florida Senate but did not make it out of committee in the Florida House.

In the last fiscal year, CFO Sink’s department opened 267 annuity investigations involving seniors statewide and 52 in the Tampa Bay Area, recovering more than $1.5 million for Tampa Bay area seniors since February 2008. Four seniors joined CFO Sink at today’s press conference and described their personal stories:

· Bonnie Madden, 82, who at the advice of agent Randolph H. Kahl-Winter, liquidated her existing investments to purchase two annuities with 10- and 15-year surrender periods.  The transactions generated $52,355 in commissions for the agent, but Madden would have been unable to pay the premium on this inflated policy and would have cost Madden nearly $300,000 of her life savings if the Department of Financial Services had not intervened.  CFO Sink’s Department of Financial Services recovered Madden’s money. 

· Anne Ridings, Director of Guardianship with Lutheran Services Florida, who represented the late Joseph Seale.  At the age of 85, Seale was sold three annuities that represented all of his liquid assets.  Within three months of the sale, Seale was in the hospital twice and Lutheran Services Florida was appointed as his guardian by the courts.  Lutheran Services notified the department that Seale was being evicted from the nursing home because he had no funds.  CFO Sink’s Department of Financial Services intervened and got back his full investment totaling more than $250,000.

· Robert and Marie St. Germaine were convinced by agent Randolph H. Kahl-Winter to take monies from their investment accounts and place them in a Flexible Premium Deferred Annuity, which had a surrender period.  They ended up borrowing money from friends to make ends meet.  With the help of CFO Sink’s Department of Financial Services, they received a refund totaling $201,000 plus interest.

Florida is currently home to more than 2.9 million Floridians over the age of 65. The state’s senior population is projected to grow by as much as 30 percent, and many of these seniors will look into investing in annuities.  To learn more about CFO Sink’s Safeguard our Seniors Task Force or what to consider when purchasing annuities, visit www.flseniors.net.  Floridians who believe they may have been the victim of annuity fraud should call (850) 413-3089 or toll-free at 1-877-My-FL-CFO (1-877- 693-5236) or log on to www.MyFloridaCFO.com to file a complaint.