ING Annuity Fraud Class Action Lawsuit Trimmed

A California federal judge has dismissed several claims in a class action lawsuit against ING USA Annuity and Life Insurance Co., accusing the company of 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.

The ING annuity class action lawsuit alleged that ING promised to protect the retirement savings of the senior citizens who purchased their policies, but hid the complex financial structures, which led to the poor performance of the annuities. 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. Judge Curiel’s order also left seven claims standing for breach of fiduciary duty and fraudulent concealment, among other charges.

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

Abbit filed his annuity fraud lawsuit on Sept. 25, 2013, seeking to represent all Californians aged 65 or older who purchased an ING indexed annuity directly or through borrowing against an existing life insurance policy.

The class action lawsuit claims that ING misled the purchasers with false or misleading brochures which claimed “100% of your premium is put into the contract.” Abbit states that he almost immediately lost more than $100,000 of the value of his retirement savings 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 to uninformed senior citizens who lacked a solid understanding of complex financial systems or products.

>>Senior Financial Scams Lead to Lawsuits

On Nov. 25, 2013, ING filed its motion to dismiss the annuity fraud class action lawsuit on the grounds that every aspect of the contract had been fulfilled, along with any additional promises made in the brochure. While Judge Curiel dismissed many of Abbit’s charges, he denied ING’s dismissal request because he found that the plaintiff had sufficiently proven that the contract had been breached. This decision was based on ING’s failure to credit the seniors’ annuity daily, as promised in the contract.

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. It is important to be wary of possible annuity fraud when:

• The senior is unlikely to live long enough to collect his or her payments
• The annuity makes up more than 35 percent 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 percent of the principal
• The same agent sold the senior multiple annuities

The ING Annuity Class Action Lawsuit is Abbit v. ING USA Annuity and Life Insurance Company, Case No. 3:13-cv-02310, in the U.S. District Court for the Southern District of California.

Join a Free Class Action Lawsuit Investigation

If you believe that you or a loved one have been the victim of a senior financial scam involving annuities or life insurance products, you have legal options. Please visit the Life Insurance Claims Lawsuit & 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.