She has dementia and was talked into buying an annuity at aged 90. Mom now lives safely in a Memory Care facility, however, a year ago she was still insisting on living in her home with no outside assistance. Her dementia has progressed over the past 4 years or so, from forgetfulness and mean spiritedness to loss of her executive functionability and serious safety concerns. Mom has historically accused all of us of stealing her knic-knacks, clothes, dish pans, silly stuff. Big stuff, not so much. Complete strangers have been really robbing her through unsavory schemes and she sees nothing wrong. With us, old lamp shades that have virtually disintegrated with age, Mom has accused us of sneaking into her home and shredding while she slept. She has seen helicopters flying overhead, reportedly sprinkling pine needles onto her yard. Neighbors digging up her bushes in the middle of the night. She has had a difficult time, worst of all has made many poor financial decisions along the way. Until recently, though, she has kept her affairs close to the vest and has refused our help and intervention. As her dementia progressed, we have been able to step in and reverse most of her poor money decisions and have her ill spent money returned to her. Unfortunately though, last November, she was solicited by an insurance salesman to partially surrender an annuity she had purchased in 2011 to secure herself into another annuity that promised a 1% better interest rate for the first year she had it. She is unable to cash out until she turns 101. The original annuity held most all of her available funds, but its balance was significant enough that after four years she would have had liquid funds available from interest earned that would have enabled her to live comfortably, to transition into assisted living. Also, it was around that time, end of year, 2015 that Mom's dementia had progressed to the point that she did not even remember having made this transaction. It was not until a few months later that she called my husband, her son, and told him she was missing a large sum of money. We lived 200 miles away from her at the time (she is since relocated to within 10 miles of our home) and started making inquiries and went to her home to see what we could find. My husband called Mom's bank, and they were able to confirm the deposit and subsequent check that Mom wrote to the new insurance company for the new annuity. Mom had no recollection of this event. When we explained what had happened to her, she acted as though nothing had happened, and that if it really had, that it was no big deal. We found the annuity contracts, scoured them for ways to help her get out from under either one of both of them, only to learn she did not sign a waiver that would entitle her to be released from the annuities should she need the funds for care. She opened her books to us to review and we learned she was making late payments on credit card purchases for unnecessary, ridiculous items and writing checks willy nilly to every Tom Dick or Harry who asked her for a contribution. Her check book made no sense, and was filled with scrawl and scribble, it was clear she had lost her ability to handle this part of her life. It was at that time that she did acknowledge she should no longer be handling her finances and agreed to have us start paying her bills. We had her mail forwarded to our home and gained access to her checking accounts (My husband is DPOA, thank God). We also got her to agree to home health care, figuring their presence would afford her some protection and provide care that she needed. We made the mistake, though, of leaving her with checks and a credit card at the time, figuring that since we were receiving her mail and handling her money, we could put a stop to any shenanigans. We were wrong. She got scammed by a home repair person (who has been caught and is facing felony charges but has no money to pay Mom back) about a month later. Fortunately, the home health aide alerted us to this occurrence, or he would probably have not been caught. After this ordeal, we explained to Mom that too many bad people prayed on vulnerable like herself. She agreed that it was time to move closer to us in a protected community. We now have her safe, but she has funds locked up in these annuities and needs that money to help pay for her care. She is in a pickle. We contacted the state insurance commission for assistance with getting her investment money back, but they saw nothing wrong with the annuity being sold to Mom. In reviewing the sales papers, Mom did not complete the financial statement, that it was actually completed by the agent. The only writing on the application in Mom's hand, is her signature. She truly had no idea what she was purchasing. She thinks an annuity is just an account that she can take her money from whenever she wants or needs it! She needs it now, but it is trapped. We do not know if we should take the penalty (which is approximately 18% of the value) to free up funds, or what. Help.
2. I don't know if the Federal Consumer Protection Agency would get involved, but it's worth the effort to contact them.
You could also ask your representatives and legislators to intervene, especially those who are running for election and could leverage their help into a campaign issue.
You could also find out which federal committees exist to address either or both insurance and annuity issues and elder abuse. Sometimes someone will be wllling to hold hearings and call the offenders on the carpet. Public outing and humiliation might not bring a resolution, but you never know.
3. Have you contacted the company for which the agent works? Some might cover for him; others might be scandalized that such an eggregious abuse has occurred. I would make it clear that, unless the insurance is a free agent, they should share responsibility for not properly vetting this guy's credentials and ethics. Maybe they need to do a background check on him as well as review all the annuities he's sold to see if this is a pattern.
You could also ask an attorney (see the comment below about a consultation) what action could be taken against the underwriter.
4. It's probably too late to do much about the workman scammer, but at least file a complaint with your state's building and licensing divison (probably titled something different in every state). You might also contact the prosecuting attorney and ask to speak at the sentencing, once the case reaches that point.
5. If the tradesman was listed with Angie's List, file a complaint with that organization. Despite the cheery Angie commercials, not all her so-called good tradespeople are that. I've read of even skilled DIYers having problems with improperly vetted tradespeople and inadequate, improper and unacceptable performance.
6. If your state has an Elder Law agency (Michigan does), contact them about what legal remedies you might have against the insurance agent. Michigan will typically get information on the nature of the complaint, ask one of the participating attorneys to return the call in a few days, and I get limited but helpful free legal advice. It is income qualified though, so call on behalf of your mother.
7. AARP sometimes publishes stories similar to the annuity issue. It would involve some revealing of personal information, and I don't know if it would help in the long run, but you might explore that option.
8. As to rescinding the annuity, I think after the work you've done and found no satisfaction, it might be time to consult an attorney. I'm not even sure though which would be the best practice area, preferably a firm that litigates against insurance agents and companies for abuse, including against those who aren't able to comprehend the effects of the annuity.
Both of these are elder abuse offenses so that might be the angle to pursue, especially against the insurance agent.
9. Lastly, there's public humiliation. Local tv stations love to expose nasty people who scam elderly people. The publicity might not get the company to rescind the annuity, but it would probably get the attention of others and help prevent them from getting scammed by the sales agent. And the company presumably wouldn't be too happy that its agent is drawing such negative publicity.
I've thought what I would do in this situation, as I would be livid and ready to draw blood (figuratively speaking). But I would be angry enough to find out if there are any legal recourses, including suing the agent and underwriter to break the contract on the grounds of elder abuse and exploitation.
I wish I had something more concrete to suggest; hopefully others will.
As I got involved I soon realized That Dad was developing dementia and had made a mess of their finances, opening accounts, moving papers in and out of a safe deposit box, and buying these annuities. It's clear to me that any agent would have realized Dad was not capable of financial decisions within 5 minutes.
I spent months finding and securing accounts, got a POA and took over the finances. I tracked down the agent who avoided me and would not respond to information requests. He's since been fired or moved on, I'm not sure which.
I'm 600 miles away and I was finally able to get some clarification on the annuities from the agency in my area. But these guys also tried to sell me more complex annuities, long term care etc. Really?
Fortunately most of these annuities have matured now and I can withdraw them without penalty. I would have a penalty on some of the funds but I would take the hit if I needed the money for eldercare, which in our case, is going to be pretty soon.
My gut reaction to your situation is first to raise hell with the folks that tricked your mom into buying these policies. Track down the agent confront him. Go to his superiors. Demand that he/she be fired. Threaten legal action and tell them you are prepared to talk to the press if the company does not offer some relief and adjustment.
This is large scale sleazy. If I had ever found the creep that pulled this crap on my dad bodily harm may have ensued.
Also check to see what she has done with her life insurance policy if applicable. The same scum that sold the annuity also converted his paid up life ins. policy to one that "canibalized" itself if not cashed out at age 90. Nobody knew, he did not remember.....so totally lost that investment......everybody read the fine details of those policies!!! I am sorry you have such a mess, my best to you!
I recall when a BOA customer complained about a charge or some change BOA was instituting. Thousands of people responded to support her, BOA got very negative publicity, and rescinded the proposal.
Maybe a "boycott xyz agency - find another agent and underwriter" campaign might just work. But use the words "elder abuse by insurance agent" or something similar in your title.
And affirming my earlier comment, I definitely see this as a predatory agent and underwriter.
Fortunately, my husband is an attorney. He went right to the bank and told them his father was a vulnerable senior and he would litigate if they didn't reverse it. They reversed it.
Sometimes the threat is enough. An attorney might get it done if you can't get anywhere. So sorry to hear you and your mother are being put through this!
What you said in your post was enlightening, thanks!
Am I redeemed?
Get incapacity letters from one or two physicians, whatever is required by the language in your POA and/or rules of your state (this is also needed to fully "activate" the POA so you can do more with it beyond routine small transactions that people do not bother to question) ideally documenting she was incapacitated at the time she signed that if someone it willing to do that for you.