Colorado Bankers (CB Life)...

[Stephen Round]

"So according to the other rating it had at the time, it (CBL) was far from a top rated carrier. It was an "at risk" carrier by their standards."
So scagnt83, if that was the case in 2017, wouldn't Citizens Bank be liable for all of their customers getting hooked into this investment? After all, they were using their personal reputation to help sell this product.

 

[shooter]

Banks just like some annuity marketing IMO's
will sell anything that pays a high commission to them.

There is a saying, The company made money and the agent/broker made money,
so, two out three ain't bad!!!
Guess who gets left out?
Thats right the consumer.

This week I had an annuity marker tell me how great this new annuity was.
The conversation went like this.
IMO guy" this new annuity is hot be first to get it out to your customers".
I said " but, they have a poor rating B++"
IMO guy replied, "they are very financially sound".
My reply " based on what financial criteria"?
IMO guy "we have other annuities buy the commission is low".

Consumers are sitting ducks I hate to hear that people make decisions.
without the fact, then pay a high price.

 

[Allen Trent]

Banks just like some annuity marketing IMO's
will sell anything that pays a high commission to them.

There is a saying, The company made money and the agent/broker made money,
so, two out three ain't bad!!!
Guess who gets left out?
Thats right the consumer.

This week I had an annuity marker tell me how great this new annuity was.
The conversation went like this.
IMO guy" this new annuity is hot be first to get it out to your customers".
I said " but, they have a poor rating B++"
IMO guy replied, "they are very financially sound".
My reply " based on what financial criteria"?
IMO guy "we have other annuities buy the commission is low".

Consumers are sitting ducks I hate to hear that people make decisions.
without the fact, then pay a high price.

But luckily regulators have instituted best interest standards for the agents ( not the carrier) so now consumers can rest assured that the majority of agents that only see a couple bullet points, are looking out for the consumer best interest. ....... Lol

 

[scagnt83]

Banks just like some annuity marketing IMO's
will sell anything that pays a high commission to them.

There is a saying, The company made money and the agent/broker made money,
so, two out three ain't bad!!!
Guess who gets left out?
Thats right the consumer.

This week I had an annuity marker tell me how great this new annuity was.
The conversation went like this.
IMO guy" this new annuity is hot be first to get it out to your customers".
I said " but, they have a poor rating B++"
IMO guy replied, "they are very financially sound".
My reply " based on what financial criteria"?
IMO guy "we have other annuities buy the commission is low".

Consumers are sitting ducks I hate to hear that people make decisions.
without the fact, then pay a high price.

B rated carriers have to pay higher comp and higher rates because thats the only way anyone is willing to do business with them.

If the B rated carrier had the same rates as the A rated carrier, who in their right mind would choose the B rated carrier??

I had a recent convo with another agent that was like that. He kept calling it the "9% annuity".. and I dont mean 9% to the client... lol. And of course it was a 10 year product with rates worse than the 7y counterpart.

 

[scagnt83]

"So according to the other rating it had at the time, it (CBL) was far from a top rated carrier. It was an "at risk" carrier by their standards."
So scagnt83, if that was the case in 2017, wouldn't Citizens Bank be liable for all of their customers getting hooked into this investment? After all, they were using their personal reputation to help sell this product.

Liable in what way? Legally? If so, by what standard? ... and with what proof?

Those questions are your problem.

As an individual, if you dont have those words in writing or in a phone recording from Citizens Bank, its your word against theirs. I promise the agent will not repeat that in arbitration or in litigation.

Based on your story, they violated multiple laws when selling this to you:
- Substantially misrepresented the financial condition and financial ratings of the company, and the risks involved when dealing with a company of this nature.

- Used the State Guaranty Association to help induce a sale.

- Misrepresented what the SGA is, what it does, and how it works... while using it to induce a sale.

- Misrepresented how the product works and its available liquidity in the event of an emergency

And if this was part of a fee based financial plan, they violated their legal fiduciary duty to put your best interest first and to fully and honestly disclose the risks of the product.

----

It matters if this was part of a financial plan or not. That could be a very big deal if so and allow you to take them to Arbitration and it would matter less what evidence you have since they had a Fiduciary Standard to uphold.

If this was just an insurance sale. You can file suit against the agent. Not Citizens, but the agent and the subsequent insurance agency (likely a different entity than Citizens).

Maybe their E&O coverage will cover it, maybe not. Either way, you can take them to court. If E&O covers it they would certainly settle if you have any of that in writing. The agency will have some cash flow at least, the agent probably has minimal assets to go after.

Holding Citizens liable is hard to do if they were not the agency.

You need to look at your insurance contract and other material you were given along with it. Often it will list the agency that the agent goes through. If it says Citizens Bank or a subsidiary of it, then you could have a case against them... if you have any of it in writing.

But most people dont get that stuff in writing. IF you did, you have a case. If you didnt, you dont.

What this really needs is a class action against Citizens Bank. I think they have been mentioned a few different times related to these sales of CB Life MYGAs. One "he said she said" situation is not proof.... but if 100 or 1000 customers had the same exact story... then suddenly its a billion dollar case.

 

[Allen Trent]

Maybe their E&O coverage will cover it, maybe not. Either way, you can take them to court. If E&O covers it they would certainly settle

Hard part with many of these under $250k is a lawsuit may not result in damages as it is still unknown what financial loss the individual had. If they eventually get all their money via liquidation & Guaranty Association, the only financial loss might be for the amount of opportunity cost after the rate lock expired where they could have possibly gotten better returns elsewhere. In many cases, that is maybe 2-3% difference in interest for a couple years.

 

[Stephen Round]

Thanks again, Scagnt83, for your input. This, too, may be significant:
Back in 2017 Citizens Bank considered the $100,000+interest invested in this annuity part of our total toward their "Platinum? Checking" plan. There were certain perks like no-charge checking and overdrafts. For the first couple of years the figure showed up at the bottom of our on-line account page like this:
Joint - With Rights of Survivorship (J)
-4012 $104,233.24

After the sh** hit the fan, our retirement CLB
annuity all of a sudden showed $000.00 with no explanation why and was no longer counted toward our account total.
Really????

 

[Stephen Round]

Hard part with many of these under $250k is a lawsuit may not result in damages as it is still unknown what financial loss the individual had. If they eventually get all their money via liquidation & Guaranty Association, the only financial loss might be for the amount of opportunity cost after the rate lock expired where they could have possibly gotten better returns elsewhere. In many cases, that is maybe 2-3% difference in interest for a couple years.

My wife and I are retired and in our 70's. We could both be dead by the time this is settled.

 

[scagnt83]

Hard part with many of these under $250k is a lawsuit may not result in damages as it is still unknown what financial loss the individual had. If they eventually get all their money via liquidation & Guaranty Association, the only financial loss might be for the amount of opportunity cost after the rate lock expired where they could have possibly gotten better returns elsewhere. In many cases, that is maybe 2-3% difference in interest for a couple years.

IDK. I think the lack of access could be big factor in litigation. What aspects of life did it affect not having that money? What hardships were incurred?

Go back and read this thread and the others, consumers have mentioned not having funds for medical bills, living expenses, risking eviction, etc.

They can easily calculate lost opportunity cost. And sure, maybe its only a few percent difference.

But planning to have those funds in 3 years... and 6 years later still no access... that is a serious financial hardship caused by the agents negligence.

You are assuming everyone planned to just roll it to a new MYGA and keep earning interest. Plenty probably planned on rolling to a SPIA and taking lifetime income. Or drawing down that bucket for specific future expenses they now cant cover. Most get rolled and keep earning interest, but many get used after the surrender period.

Not to mention any punitive damages for pain, suffering, & mental anguish.

Also time spent dealing with the mess can be included as well.

---

But the real money for the lawyer is the assets. So anyone with substantially over $250k, and evidence of the negligence, might have a chance with an attorney taking it pro-bono.

---

If someone had the SGA issue in writing, imo, they could file a claim themselves with the E&O carrier and very likely win a settlement. jmo

 

[scagnt83]

Thanks again, Scagnt83, for your input. This, too, may be significant:
Back in 2017 Citizens Bank considered the $100,000+interest invested in this annuity part of our total toward their "Platinum? Checking" plan. There were certain perks like no-charge checking and overdrafts. For the first couple of years the figure showed up at the bottom of our on-line account page like this:
Joint - With Rights of Survivorship (J)
-4012 $104,233.24

After the sh** hit the fan, our retirement CLB
annuity all of a sudden showed $000.00 with no explanation why and was no longer counted toward our account total.
Really????

If you made it to court or arbitration against Citizens bank, sure, it would probably help. It shows that they promoted the product through the bank and helped to incentivize the sale (possibly another violation of regulations).

But here is the issue, unless Citizens bank is the agency or owns the agency, its going to be really really hard to go after them like that.

I get that you are pissed. I get that Citizens SHOULD be on the hook. But your true legal case (that clearly has legal standing) is against the Agent, Agency, & Insurer.

You need to ask yourself, do you care about the ultimate justice or do you care about financial compensation?

Going after Citizens is pursuing the ultimate justice in this situation.
Going after the agent/agency E&O policy is how you get financially compensated in a reasonable amount of time.

----

Being $100k, that makes it even harder for you to file a claim, since the SGA should cover the entire amount eventually.

However, you could possibly go after them for loss of access to the funds. If its caused severe hardship/stress/etc. then you could possibly have a claim even while its still in receivership. You wouldnt be able to go after the $100k. But lost opportunity cost (lost interest) along with pain suffering could certainly be sought now.

None of that means you will be successful. Im no lawyer. But its the options I know of that are available to you.

---

My suggestion is two fold:
1. Before you do anything else. Email the agent (be nice) about the SGA issue. Get a response in writing. If they say the same thing, reply back confirming with them if thats the same thing they told you prior at the time of sale. (ex: you told us that when we bought it didnt you? but we are just worried with all the bad press about this... are you sure what you told us originally when we got it is correct? we really appreciate your guidance! )

2. If #1 succeeds, contact the agent and ask for the name of their E&O carrier, and the name of their agencies E&O carrier. IF they refuse, remind them that they are legally required to provide you this info if requested, and you will report them to the state DOI if they refuse.

Write a Letter of Demand to both E&O carriers describing the situation, your losses, & your evidence to prove what was said to you. Assuming you have that evidence, they will settle very quickly most likely. Its not too much different than filing a claim against someones auto insurance.

But you have to have the evidence to have any chance.