Amanda Antell  |  March 13, 2014

Category: Legal News

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Annuity fraud lawsuitA California federal judge on March 4 dismissed several claims against ING USA Annuity and Life Insurance Co. for allegedly selling life insurance contracts to senior citizens that did not pay out as promised.

The judge found that the purchasers could only sue the company over what was explicitly breached according to their contracts.

U.S. District Judge Gonzalo P. Curiel dismissed the plaintiffs’ charges of: breach of contract, breach of implied covenant of good faith and fair dealing, and concealment in an insurance contract.  Each of these claims came in a class action lawsuit alleging that ING promised to protect the retirement savings of the senior citizens who purchased their policies, but had hid the complex financial structures, which led to the poor performance of the annuities. Curiel’s order also left seven claims standing for breach of fiduciary duty and fraudulent concealment, among other charges.

According to the lead plaintiff, Ernest O. Abbit, an 83-year-old retiree who bought one of INGs annuity contracts, the company had breached its contract and broke all promises to him and the other plaintiffs.  Abbit alleges that ING’s brochures promised the company would credit the purchaser’s interest on the full premium, along with a 5 percent premium bonus that could not be diminished under any of the implied circumstances. However, Abbit and the other plaintiffs claimed those terms were not met in any of their contracts.

Abbit filed his annuity lawsuit on Sept. 25, 2013, seeking to represent all Californians who are 65 or older who purchased an ING indexed annuity directly or through borrowing against an existing life insurance policy.  Abbit stated that he almost immediately lost more than $100,000 of his retirement savings value on the first day of his investment, with his fellow plaintiffs losing similar amounts.

Abbit states that structures of the annuities ING sold were even more dangerous for uninformed senior citizens who lacked a solid understanding of complex financial systems or products.  On Nov. 25, 2013, ING filed its motion to dismiss Abbit’s lawsuit, on the grounds that every aspect of the contract had been fulfilled, along with any additional promises made in the brochure.

Although some of the charges were dismissed, Curiel refused to dismiss the entire vase because the plaintiffs had sufficiently provided evidence that contract had been breached.  This decision was based on ING’s failure to credit the seniors’ annuity daily, which had been promised in the contract.

Allegations regarding the interest bonuses, were dismissed. Additionally, Curiel also dismissed the claims regarding breach of covenant of good faith and fair dealing, finding that the annuity policy could not impose limits on the parties beyond those incorporated in the agreement.  However, Curiel states that the plaintiffs have sufficiently proven they can bring claims alleging breach of fiduciary duty, financial elder abuse, fraudulent concealment, unfair competition, and failure to supervise.

Overview of Annuity Fraud

For elders to protect themselves, legal experts encourage senior citizens to keep themselves informed of their legal rights regarding their finances and to be on the lookout for aggressive the insurance agents.  Warning signs of annuity fraud include, but are not limited to:

  • Senior is unlikely to live long enough to collect their payments
  • The annuity makes up more than 35% of the senior’s assets
  • The Surrender Fee (the amount the senior will have to pay if they cash-in an annuity early) is more than 14% of the principal.
  • The same agent sold the senior multiple annuities

 

Annuity Litigation Movement

This case is labeled as: Abbit v. ING USA Annuity and Life Insurance Company, Case No. 3:13-cv-02310, in the U.S. District Court of Southern California.

File an Annuity Lawsuit Today

If you believe that you or a loved one have been the victim of an Annuity financial scam, you have legal options.  Please visit the Life Insurance Annuities Fraud Class Action Lawsuit Investigation.  There, you can submit your claim for a free legal review and if it qualifies for legal action, a seasoned Annuity lawyer will contact you for a free, no-obligation consultation.  You will be guided through the litigation process at no out-of-pocket expenses or hidden fees.  The Annuity attorneys working this investigation do not get paid until you do.

 

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One thought on Federal Judge Trims Annuity Fraud Allegations against ING

  1. jody ezell says:

    Please add me to the list

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