A
Missouri insurance agent who used a lead-generation mailer advertising
"FREE government benefits" was fined by the Iowa Insurance Division
last week.
John A.
McAfee of Hannibal, Mo., agreed to a consent order that fines him $10,000, plus
$1,800 for costs of investigation, and subjects his company, McAfee &
Associates, to one year of monitoring.
In a
separate judgment to satisfy a complaint lodged by the Iowa attorney general,
McAfee & Associates and its representatives -- McAfee; Alexander Chasteen
of West Des Moines, Iowa; Clay Walters of Grimes, Iowa; Justin Roberts of
Waukee, Iowa, and Rachael Edmondson of Kansas City, Mo. -- are barred
from sending mailers to Iowans that, among other things, “create a false
impression that the mailer is sent from any government entity or department.”
The
mailers also must say that McAfee & Associates is a for-profit insurance
business. The defendants must pay a total of $5,000 to the state.
According
to court documents, the defendants denied knowledge of the mailer design and
settled in order to "avoid protracted litigation."
A
licensed insurance producer for 42 years, McAfee is a general agent manager for
Old American Insurance. As such, he is responsible for marketing, recruiting,
training and supervising subagents.
'Official
Business'
About
June 2018, McAfee's company contracted with Countrywide Printing and Mailing
Services of Tempe, Ariz., to send a mailer to at least 61,750 Iowans. The front
of the mailers had an illustration of the U.S. Capitol, and below it said “Official
Business” and “Important information about your government benefit.”
“Receive
your FREE Government Benefits Information Brochure” with “Free Government
Benefits” appeared in larger type.
Inside,
the mailer offered a “Senior Final Expense Program” that would “pay 100% of all
funeral expenses not paid by Social Security, up to $15,000 for each senior
covered. To see if you qualify, mail this postage paid card today.”
Addressees
were asked to provide name, address, phone, age and spouse’s age and name. In
small type at the bottom of the page, the card read “Not affiliated with or
endorsed by any government or Medicare program.”
The
Attorney General’s investigation showed that the mailers were targeted to
Iowans between the ages of 60 and 85 and with annual incomes as low as $15,000.
More than 1,000 Iowans responded to the mailer.
"When
contacted by a subagent, some consumers told the subagent they were surprised
at being solicited to purchase a life insurance policy as they believed that
the mailer was sent by the government and that the product being offered was a
free government program," the Insurance Division consent order stated.
Barred
From Contact
In a
consent judgment entered in November, Countrywide and its owner, Troy V. Fish,
are barred from engaging in printing and mailing services aimed at Iowa
consumers. They also must pay $10,000 to the Consumer Fraud Enforcement Fund
and destroy any names or other personal information of Iowans. Fish also agreed
to cooperate with the Attorney General’s investigation.
If the
defendants violate the consent judgment, they could be subject to fines of up
to $5,000 per day of the violation under Iowa’s Consumer Fraud Act.
InsuranceNewsNet
Senior Editor John Hilton has covered business and other beats in more than 20
years of daily journalism. John may be reached at john.hilton@innfeedback.com.
Follow him on Twitter @INNJohnH.
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