February 12, 2010

CFO SINK TAKES FIGHT FOR TOUGHER SENIOR INVESTOR FRAUD LAWS TO PALM BEACH

Sink Pressing for Legislation to Increase the Penalties for Agents Misleading Senior Investors

TALLAHASSEE— Florida CFO Alex Sink today hosted a ‘Safeguard Our Seniors’ workshop in Palm Beach with Representative Maria Sachs, part of CFO Sink’s statewide blitz to draw attention to the need for tougher senior investor fraud laws. 

“We need tougher laws on the books, but so far some politicians in Tallahassee have been protecting the special interests, not our seniors’ interests,” said CFO Sink. “Seniors are losing their life savings, deceitful agents are operating undeterred, and it’s time to stand up and take action. Nothing should stand in the way of holding criminals accountable for their actions, especially special interests and unresponsive politicians.”

Seventy-four year old Palm Beach County resident Josephine Passinissi was on-hand to tell her story. Passinissi, 74, was defrauded by Larry Yale Krakow, 52, of Delray Beach. Krakow befriended Passinissi, buying her flowers and eating dinner with her at her home. Believing him to be a reliable source of investment advice, Mrs. Passinissi to liquidated her investments and placed $274,384 into annuities that paid thousands to Krakow, but left her savings inaccessible. Krakow has been suspended and fined $25,000 for numerous violations of the Florida insurance code.

“Never trust anyone at first, check it out, and read everything,” said Passinissi. “Never put trust in someone, no matter how nice.”

CFO Sink and Safeguard Our Seniors Task Force members are holding eleven workshops across Florida this week to highlight the need for stronger punishments against scammers who prey on Florida’s seniors, and teach seniors what to look out for to better protect themselves. To view the 11 statewide workshop blitz stops across the state or hear from real senior victims visit: http://www.myfloridacfo.com/Consumers/OutReach/SafeGuardSr.asp.

For the third year in a row, CFO Sink has proposed Safeguard Our Seniors legislation to strengthen senior investor fraud laws. Senator Mike Bennett and Representative Maria Sachs have sponsored the 2010 legislation (SB 844), which comes after another 800 complaints from seniors. Last year, the legislation passed in the Florida Senate unanimously, but was not even heard in a House Committee. This year’s legislation has already passed its first Senate committee.

Over the last two years, CFO Sink’s Department of Financial Services has held 380 ‘Safeguard Our Seniors’ events throughout the state. The seminars inform and teach seniors how to protect themselves from financial fraud. The programs have helped Florida seniors recover nearly $9 million, and helped put some senior scammers behind bars.  But unfortunately, investigations against senior scammers are on the rise, with 277 annuities investigations opened in 2009 alone.

CFO Sink’s ‘Safeguard Our Seniors’ legislation makes the act of “twisting” or “churning” an annuity to a senior consumer a third-degree felony, punishable by up to five years in prison. Twisting occurs when an existing life insurance policy or annuity contract from one insurance company is surrendered and the money is used to purchase another annuity from a different insurance company.  Churning occurs when an annuity is switched within the same insurance company.  Either way, the insurance agent gets a commission, and the annuity switch may not hold any financial benefit for the consumer and, in fact, may actually cost the consumer money.

Other protections under the proposed legislation would:

  • Limit the surrender charge period for an annuity sold to a senior consumer to ten years and the surrender charge to 10 percent;
  • extend the “free look” period for the purchase of an annuity by a senior consumer from 14 to 30 days;
  • authorize the Department to require an agent to make monetary restitution to a senior consumer they’ve harmed;
  • prohibit the Department from issuing another license to a former licensee who has had his or her license revoked resulting from the solicitation or sale of an insurance product to a senior consumer and
  • require an insurer to provide a cover sheet attached to the policy when an annuity is issued informing the purchaser about the free look period and about how to contact the insurer and the department if they have questions about the annuity.

The Safeguard Our Seniors events this week arm seniors, as well as their family and caregivers, with tips and warning signs to be aware of when they are looking to purchase insurance and financial products. There will also be investigators on site to take complaints.

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.