by Guest » Thu Jul 03, 2008 10:40 am
Guys..its truly interesting to see so many people have expressed their grievances at this fraud forum.
It needs a lot of guts to stand against frauds & I'm amazed to see a couple of you have really done that. I still remember the day (Dec, 2003) that my fiance went on to see the American Family Insurance representative & got a car insurance policy for us.
It was quite a shock for me when our car got stolen after that. American Family seemed quite proactive to meet the claim initials as we were to shift from that place the next day.
A couple of days later we were being consulted by their rep about the residue of our claim which according to them could not be met due my fiance's felony conviction since 2 decades. What they had to say was that American Family would not have covered him at all in case they had this information beforehand. They had given us an ultimatum that if he withdraws the claim he would be free or else they would seek legal help & see that he gets a sentence.
In mid-2004, my fiance got convicted of insurance scam. It was evident that the applications submitted by American Family Insurance to the attorney general were fraudulent. Once he recalled the signing procedure, he never remembered the agent asking him about his felony conviction. The agent must have submitted the paper works for which he had obtained my fiance's signature. The applications with us were left blank for those questions. My fiance was up with 1-6 for 2 folds of insurance fraud..I haven't read much about the american family insurance complaints but any advice would be of great help to people under such circumstances!
Thanx.. Amy_LV
It needs a lot of guts to stand against frauds & I'm amazed to see a couple of you have really done that. I still remember the day (Dec, 2003) that my fiance went on to see the American Family Insurance representative & got a car insurance policy for us.
It was quite a shock for me when our car got stolen after that. American Family seemed quite proactive to meet the claim initials as we were to shift from that place the next day.
A couple of days later we were being consulted by their rep about the residue of our claim which according to them could not be met due my fiance's felony conviction since 2 decades. What they had to say was that American Family would not have covered him at all in case they had this information beforehand. They had given us an ultimatum that if he withdraws the claim he would be free or else they would seek legal help & see that he gets a sentence.
In mid-2004, my fiance got convicted of insurance scam. It was evident that the applications submitted by American Family Insurance to the attorney general were fraudulent. Once he recalled the signing procedure, he never remembered the agent asking him about his felony conviction. The agent must have submitted the paper works for which he had obtained my fiance's signature. The applications with us were left blank for those questions. My fiance was up with 1-6 for 2 folds of insurance fraud..I haven't read much about the american family insurance complaints but any advice would be of great help to people under such circumstances!
Thanx.. Amy_LV
Posted: Mon Jan 13, 2014 01:07 pm Post Subject:
This is totally unfair and certainly not an acceptable business practice.
Do the math... has AmFam paid out more then they collected from you over 20 years?
To an extend, a company has a choice to do business as they see fit. If a company makes a widget for $5 and ends up only being able to sell them for $4 do you think they should be required to sell them? Certainly insurance is different and it's regulated. But the situation is the same. They can't be forced to insure every risk.
Posted: Tue Jan 21, 2014 04:27 pm Post Subject:
Aren’t these insurance policies meant to cover people during such perils?
Yes, they are, and you were.Is that only people who don’t make any claim will be accepted by the insurance providers?
No, that's not true.We were told that the only reason for our insurance coverage getting dropped is because of our consecutive claims.
That is a perfectly good reason to do so.Just like McDonald's, insurance companies are in business to make money. McDonald's makes money by selling fried dead cow parts to people. Insurance companies make money by selling protection against certain losses.
In the late-1950s and early-1960s, I can remember that a McDonald's hamburger cost 10 cents, and a cheeseburger was 12 cents. Do they sell the same 1.6 ounce hamburger for 10 cents today? Of course not, their costs have increased and so has the price of the burger. If people think the cost is too high, they look for cheaper burgers somewhere else.
If an insurance company pays a claim for a covered loss, they absorb that on the basis that not everyone they insure suffers a similar loss on the same day. If they pay two or three similar losses for the same insured, they may be able to absorb those losses in the same manner. But what makes you think the insurance company has to continue covering a person who causes them to lose far more money than they have or will collect in premiums, past, present, or future?
we had to make 4 natural calamities and 1 flood claims, for events that were beyond anyone’s control.
That may very well be true, and people all across the US have suffered cancellations/non-renewals for the same reason.The law does not force any insurance company to take all risks, and they cannot discriminate against a person on the basis of race or religion or where they were born (among other things), but they can certainly reject any unacceptable risk.
In those cases, there is the FAIR Plan that apportions certain "uninsurable" or high risks among all the insurance companies doing business in the state.
If you work with a local agent/broker, you will find new coverage. You can also move to some other area where you are not subject to the same kinds of "natural calamities and floods"
Posted: Tue Jan 21, 2014 04:53 pm Post Subject:
Tell me how can you say it's not counted against you in one sentence and then recant it in the next?
They never said it would not count aganist you... only that they would not increase the rates (if indeed it's as you mentioned).
We pay for a service, but as soon as you use that service they drop you for using it! Tell me how this falls under that Duty of Good Faith and Fair Dealing Act?
First, I hear you and it sucks. No doubt about that. But also look at this from the insurance companies point of view... if a person starts having loss after loss should the insurance company be obligated to simply continue to take on the risk or should they be able to say, we no longer want to sell this policy? Even in Vegas the [betting locations] can ask you to leave if you start winning big. The other part of the issue is that state tells AmFam what they can charge. Since AmFam would normally need to increase your premium and they cannot... they need to non-renew the policy. Again, it would be better if this did not need to happen.
An example would be if it cost a company $5 to make a widget and they were only allowed to sell them for $3. If you owned that business what would you do?
But again, it s_does_ suck!
Posted: Tue Oct 07, 2014 05:47 pm Post Subject:
412i,419, lawsuits, IRS audits
________________________________________
April 24, 2012 By Lance Wallach, CLU, CHFC
________________________________________
419, 412i, plans are being audited by the IRS. Lawsuits are the result.
Dolan Media Newswires 01/22/
Small Business Retirement Plans Fuel Litigation
Small businesses facing audits and potentially huge tax penalties over certain types of retirement plans are filing lawsuits against those who marketed, designed and sold the plans. The 412(i) and 419(e) plans were marketed in the past several years as a way for small business owners to set up retirement or welfare benefits plans while leveraging huge tax savings, but the IRS put them on a list of abusive tax shelters and has more recently focused audits on them.
The penalties for such transactions are extremely high and can pile up quickly - $100,000 per individual and $200,000 per entity per tax year for each failure to disclose the transaction - often exceeding the disallowed taxes.
There are business owners who owe $6,000 in taxes but have been assessed $1.2 million in penalties. The existing cases involve many types of businesses, including doctors' offices, dental practices, grocery store owners, mortgage companies and restaurant owners. Some are trying to negotiate with the IRS. Others are not waiting. A class action has been filed and cases in several states are ongoing. The business owners claim that they were targeted by insurance companies; and their agents to purchase the plans without any disclosure that the IRS viewed the plans as abusive tax shelters. Other defendants include financial advisors who recommended the plans, accountants who failed to fill out required tax forms and law firms that drafted opinion letters legitimizing the plans, which were used as marketing tools.
A 412(i) plan is a form of defined benefit pension plan. A 419(e) plan is a similar type of health and benefits plan. Typically, these were sold to small, privately held businesses with fewer than 20 employees and several million dollars in gross revenues. What distinguished a legitimate plan from the plans at issue were the life insurance policies used to fund them. The employer would make large cash contributions in the form of insurance premiums, deducting the entire amounts. The insurance policy was designed to have a "springing cash value," meaning that for the first 5-7 years it would have a near-zero cash value, and then spring up in value.
Just before it sprung, the owner would purchase the policy from the trust at the low cash value, thus making a tax-free transaction. After the cash value shot up, the owner could take tax-free loans against it. Meanwhile, the insurance agents collected exorbitant commissions on the premiums - 80 to 110 percent of the first year's premium, which could exceed $1 million.
Technically, the IRS's problems with the plans were that the "springing cash" structure disqualified them from being 412(i) plans and that the premiums, which dwarfed any payout to a beneficiary, violated incidental death benefit rules.
Under §6707A of the Internal Revenue Code, once the IRS flags something as an abusive tax shelter, or "listed transaction," penalties are imposed per year for each failure to disclose it. Another allegation is that businesses weren't told that they had to file Form 8886, which discloses a listed transaction.
According to Lance Wallach of Plainview, N.Y. (516-938-5007), who testifies as an expert in cases involving the plans, the vast majority of accountants either did not file the forms for their clients or did not fill them out correctly.
Because the IRS did not begin to focus audits on these types of plans until some years after they became listed transactions, the penalties have already stacked up by the time of the audits.
Another reason plaintiffs are going to court is that there are few alternatives - the penalties are not appealable and must be paid before filing an administrative claim for a refund.
The suits allege misrepresentation, fraud and other consumer claims. "In street language, they lied," said Peter Losavio, a plaintiffs' attorney in Baton Rouge, La., who is investigating several cases. So far they have had mixed results. Losavio said that the strength of an individual case would depend on the disclosures made and what the sellers knew or should have known about the risks.
In 2004, the IRS issued notices and revenue rulings indicating that the plans were listed transactions. But plaintiffs' lawyers allege that there were earlier signs that the plans ran afoul of the tax laws, evidenced by the fact that the IRS is auditing plans that existed before 2004.
"Insurance companies were aware this was dancing a tightrope," said William Noll, a tax attorney in Malvern, Pa. "These plans were being scrutinized by the IRS at the same time they were being promoted, but there wasn't any disclosure of the scrutiny to unwitting customers."
A defense attorney, who represents benefits professionals in pending lawsuits, said the main defense is that the plans complied with the regulations at the time and that "nobody can predict the future."
An employee benefits attorney who has settled several cases against insurance companies, said that although the lost tax benefit is not recoverable, other damages include the hefty commissions - which in one of his cases amounted to $860,000 the first year - as well as the costs of handling the audit and filing amended tax returns.
Defying the individualized approach an attorney filed a class action in federal court against four insurance companies claiming that they were aware that since the 1980s the IRS had been calling the policies potentially abusive and that in 2002 the IRS gave lectures calling the plans not just abusive but "criminal." A judge dismissed the case against one of the insurers that sold 412(i) plans.
The court said that the plaintiffs failed to show the statements made by the insurance companies were fraudulent at the time they were made, because IRS statements prior to the revenue rulings indicated that the agency may or may not take the position that the plans were abusive. The attorney, whose suit also names law firm for its opinion letters approving the plans, will appeal the dismissal to the 5th Circuit.
In a case that survived a similar motion to dismiss, a small business owner is suing Hartford Insurance to recover a "seven-figure" sum in penalties and fees paid to the IRS. A trial is expected in August.
Last July, in response to a letter from members of Congress, the IRS put a moratorium on collection of §6707A penalties, but only in cases where the tax benefits were less than $100,000 per year for individuals and $200,000 for entities. That moratorium was recently extended until March 1, 2010.
But tax experts say the audits and penalties continue. "There's a bit of a disconnect between what members of Congress thought they meant by suspending collection and what is happening in practice. Clients are still getting bills and threats of liens," Wallach said.
"Thousands of business owners are being hit with million-dollar-plus fines. ... The audits are continuing and escalating. I just got four calls today," he said. A bill has been introduced in Congress to make the penalties less draconian, but nobody is expecting a magic bullet.
"From what we know, Congress is looking to make the penalties more proportionate to the tax benefit received instead of a fixed amount."
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR and captive insurance plans. He speaks at more than ten conventions annually, writes for more than 50 publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC, National Public Radio’s “All Things Considered†and others. Lance has written numerous books including “Protecting Clients from Fraud, Incompetence and Scams,†published by John Wiley and Sons, Bisk Education’s “CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation,†as well as the AICPA best-selling books, including “Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots.†He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, or visit .taxadvisorexpert.com.
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Posted: Thu Oct 09, 2014 08:41 pm Post Subject: Settlement
How long does it take for American Family to settle an auto clam. It has been over 30 days?
Posted: Thu Oct 09, 2014 11:42 pm Post Subject:
How long does it take for American Family to settle an auto clam. It has been over 30 days?
It usually takes 30 days or less but it can take longer. It all depends on the claim. Most stated require them to notify you of the delay beyond 30 days. Have you called and asked for the status?
Posted: Mon Nov 03, 2014 06:23 am Post Subject:
In insurance, Frauds will be done under different ways. So, before we can purchase any insurance plan better to check the information and if it is possible discuss with your friends and colleagues which are known about the insurance.
commercial auto insurance houston tx
Posted: Wed Jan 27, 2016 10:53 pm Post Subject: Re: American Family fraud Scam
I am a 70 year old woman. I also am still an agent for the FBI. I have been harrassed by American Family since 1981 for an accident in which I was not a participant. I had not been ticketed, no report filed. In 1985 they filed a civil suit against me, of which I did not receive any notice. In 2003 I was charged with driving after revocation. I was not aware of the revocation but made sure I appeared in court. This, due to an injury, was very painful, my court case was adjourned until the next week, i did not,however, have to appear. My lawyer was able to get the whole case DISMISSED, he gaveled on the decision was based on the fact that court investigators could find no evidence to prove there was a reason to revoke my licence and DISMISSED the charges. Now, the DMV wants me to get sr22 insurance. I have refused. They had my licence revoked on a civil case. In 1981, they said I was involved in an accident in West Allis on or near. I 94 expressway over Greenfeild. Ave. First of all I 94 was not built in 1981 and even now there is only one part of I 94 that goes over Greenfield ave and that is right on south 6 th street. That is the only spot. I also checked with the DMV and was told that they could not find any records pertaining to the " accident" but that American Family had my licence suspended for the SAME accident. Now, what right does American Family have to ignor the decision made by Judge Fredrich Rosa. I quote" All charges against Rachel Giles have been DISMISSED. The charges have not been proven, and have no legal affect. Rachel Suzanne Giles is presumed innocent". Giles my name at the time. Now, if i was proven not guilty of driving after revocation, a criminal offense, derived from a civil suit, compounded by the DMV, for enforcing this. The main complaint always a civil case, in which CIVIL CASES, UNDER FEDERAL LAW, ARE NOT ALLOWED TO effect your licence not matter the outcome. This is a law protecting innocent people from people who use the civil court system to fraudulently SUE for monetary gain.
Further investigation into American Family, has shown that 6 out of 10 civil cases initiated were without basis. In my case American Family delibertly chose me, they had on staff several people who claimed they new me. They knew I suffered from episodic amnesia. The person that caused the accident was intoxicated. I hit a retaining wall my car was inoperable, his car was on my right behind me. He clipped the back of the car next to me and hit the retaining wall next to me ON 6th street above Greenfield ave. That is how they defraud you, me, anyone. In a case where a person with a felony can not be excluded for reimbursement. They still have to reimburse that couple for the car. It is a matter of. DISCRIMINATION, nothing more or less. They pay up or you SUE them for DISCRIMINATION on the basis of a 20 year old felony conviction. That is a no brainer. YOU SUE FOR DISCRIMINATING AGAINST YOU.
Posted: Thu Mar 03, 2016 03:11 am Post Subject:
You have been a victim of an insurance fraud. Go and get an attorney for a proper legal advice.
Posted: Fri Sep 15, 2017 05:17 pm Post Subject: AmFam Scam Amscam
In my opinion, American Family Insurance scams its own insurance agents. They profit from terminating their agents who are local small business owners trying to build a business to achieve their dreams. American Family Insurance is all about protecting the dreams of their clients, but at the same time they are crushing the dreams of their agents.
Here are some facts:
•American Family Insurance agents are in a contract that can be terminated at any time for any reason.
•American Family Insurance agents DO NOT own their “book†(the policies) and have no rights to it if American Family chooses to terminate them.
•When an American Family Insurance agent gets terminated (no matter the reason, if any), all of their policies get “bulk transferred†to another agent(s). American Family doesn’t pay commissions on these bulk transfers for 12 to 23 months.
•In addition to corporate American Family pocketing the commission for 12 to 23 months, the agent who receives these bulk transferred policies only gets paid 57% of the normal commission rate after that 12 to 23 month period.
American Family Insurance is literally profiting from terminating agents. Now, you would think that a growing insurance company would be increasing its agency force, but the amount of American Family Insurance agents has actually decreased by close to 25% over the last several years.
Why would American Family Insurance terminate good agents?
It doesn’t matter if you are a good agent or a bad agent, the company will profit more and help its bottom line by firing you. Even if you are a great agent, the company is paying you 100% of the commission rate on your policies. They can terminate you, transfer those policies to other agents, not pay any commissions at all for 12 to 23 months (the new agent is forced to service the policies for free) and then only pay 57% of the commission rate after that.
American Family Insurance pockets 100% of the commission for those 12 to 23 months, then pockets 43% of what should be paid out to its agents. :( :oops:
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