Hartford Settles Annuity Fraud Scam
The states of New York and Connecticut have fined Hartford Financial Services Group $20 million in connection with the sale of group related annuities. The investigations were conducted simultaneously by New York State Attorney General Eliot Spitzer and Connecticut Attorney General Richard Blumenthal. The basic claim is that Hartford was making secret payments to insurance brokers in order to convince the brokers to recommend Hartford annuities to pension plan Customers Over competitor annuities. The scheme involved using fake expense reimbursement agreements between Hartford and brokerages, which were nothing more than secret bonus payments for sales of Hartford annuities.
Hartford sold over $800 dollars worth of the group million annuity pension plans before the scheme was uncovered by the attorneys general. The customers were unaware of the secret payments and had been convinced that the brokers were acting in their best interests by supposedly analyzing several companies before selling them Hartford annuities. What the customers did not know is that instead of actual expense reimbursements, the brokers were receiving bonuses for recommending and pushing the Hartford annuities over competitors. The result was that the purchasers of the annuities ended up paying increased costs when they couId have gotten similar adequate products more cheaply if the brokers and Hartford had acted properly. In addition to a fine of $20 million, Hartford has agreed to improve disclosures and stop making any payments to the brokers for a period of three years. If you or someone you know has invested in annuities with Hartford, contact Lumpkin & Reeves.
