Senator Elizabeth Warren (D-Mass.) is one of the greatest warriors of our time. She stands as one woman against the massive insurance companies. This time Warren is going after the shysters who send out letters to our grandmothers, offering them a free dinner at a nice restaurant. Although the scam is technically legal, it is morally wrong, and Warren is closing in on the offenders.
Here is how the scam works. Salespeople bribe Grandma with dinner, then promise her a “guaranteed lifetime income” or “income for life” in exchange for a lump sum of her money. Their only requirement is that she must be breathing.
The scammers say their wares will do everything from help pay the mortgage to pay their children’s college tuition, plus provide a healthy income. These so-called “financial advisers” don’t tell their captive diners their dirty secret. The only one getting anything is the guy selling it. Genuine financial advisers help people and businesses set long-term and short-term financial goals.
Warren championed a year-long investigation and released her report last week. She looked at 15 of our largest insurance companies, including Allianz, Met Life, and AIG. President Obama estimates that these financial advisers cost the elderly $17 billion every year in retirement investments (annuities) alone.
These investments are similar to life insurance. The difference is when the insured person dies, the life insurance company makes a payment to beneficiaries, who are often descendants. Retirement investments are supposed to make payments during the person’s lifetime and end when the he or she dies.
In this case, the insurance giants have no intention of helping the elderly. Their salespeople receive commissions along with all sorts of freebies, such as luxurious vacations. The legal loophole that lets salespeople con the elderly can usually be found way back on page 70 or page 135 in the handy-dandy, small-print brochure they hand out over dinner.
Senator Warren is my favorite super-hero. Go get these bad guys.
