Claims of Exploitation of the Elderly in the Sale of Financial Products

There’s a new trend of lawsuits against companies selling financial products to older people. These products, called annuities, come in two main types: fixed annuities and variable annuities. Fixed annuities earn a guaranteed interest rate for a certain time, like a CD from a bank. There’s also a type called equity indexed annuities, which is tied to the stock market. Variable annuities offer different investment options and don’t guarantee returns. Lawsuits claim that these products are being sold in a way that takes advantage of older people. Many states in the U.S. have laws that protect elderly people from abuse and exploitation. Florida, in particular, has a law called the Adult Protective Services Act, which allows elderly people who have been abused or exploited to sue the person responsible and seek damages. Other states, like California, also have similar laws that allow elderly people to sue for financial abuse and seek damages. These laws are important for protecting the rights and well-being of senior citizens. Some lawyers are using a law meant to protect older adults with disabilities to file lawsuits against insurance salespeople. They claim that selling insurance to older adults is elder abuse, even if the older adult is still capable of making their own decisions. To fight these lawsuits, the insurance company will need to gather medical and financial records to show that the older adult is still capable of taking care of themselves. If the older adult is found to be unable to care for themselves, a guardianship will need to be established. In Florida, cases involving adults over the age of 65 have to move quickly through the legal process. In order to prove exploitation of a vulnerable adult, the plaintiff must show that someone they trust used deception or intimidation to take their money or property for someone else’s benefit, or that they took advantage of the adult’s inability to make decisions for themselves in order to take their money or property. In Florida, there aren’t many court cases about the rules for protecting elderly people from financial exploitation. This means that the definitions in the law can be understood in different ways. For example, some people might argue that an insurance company or salesperson are considered caretakers or have a special responsibility to older adults when selling them insurance or financial products. But usually, the role of a salesperson is just to help with the sale, not to take care of the customer. There’s only one court decision about what a “caretaker” is, where a daughter was not considered a caretaker for her mother. This means that in some cases, the rules to protect older adults might not apply when it’s a normal business deal. But in each situation, the relationship between the older adult and the salesperson is looked at carefully to see if the salesperson has a special responsibility to the older adult. The State of California and Massachusetts are suing financial companies for tricking senior citizens into buying annuities with their retirement money. They claim the companies used people’s personal information to convince them to make bad investments. The National Association for Variable Annuities says that because people are living longer, it’s not necessarily wrong to sell annuities that won’t pay out for a long time to seniors. State regulators are investigating companies that sell annuities to senior citizens. They want to make sure that insurance agents and companies are getting the right information from seniors before selling them annuities. Some class action lawsuits have also been filed against some insurance companies for selling unsuitable annuities to seniors. To protect themselves, insurance companies can use clear language in their sales material and fully explain any penalties or negative effects of the annuities. They can also provide better training to their salespeople. Selling financial products to seniors, especially annuities, is a tricky business. Lawyers are using elder abuse laws to turn individual claims into big class action lawsuits against insurance companies and their agents. State regulators and private lawyers are going after them, since there are no set rules for when it’s okay to sell these products to seniors. Each case is being decided by the courts. An annuity is a type of savings account that pays a fixed income to someone for a certain period of time, like their lifetime. It’s regulated by the state’s insurance department. Some states have laws against abusing seniors and dependent adults, and there have been recent investigations into annuity companies in several states. Geralyn M. Passaro is a lawyer in Ft. Lauderdale who focuses on defending professionals like insurance agents, real estate brokers, and title agents in legal disputes. This column was submitted on behalf of the Trial Lawyers Section by Bradley E. Powers and D. Matthew Allen. It’s all about promoting fairness and skill in the legal system.

Source: https://www.floridabar.org/the-florida-bar-journal/claims-of-exploitation-of-the-elderly-in-the-sale-of-financial-products/