Agent Fined $2k for Guaranteed Fixed Indexed Annuity Advertisement
First, if you would like to read the Consent Order signed by the NJ Department of Insurance (DOI) and the agent who was fined, click on the following link (I highly recommend you read the order):
What was the misleading FIA ad? It stated the following:
“Looking for highest guaranteed return? Up to 7% returns with NO market risk.”
Why was it misleading? Because NO FIA is available in NJ that has a guaranteed 7% rate of return.
I’m sure the ad was referring to an FIA with a guaranteed income rider that rolls up at 7% annually, but that’s not what the ad said.
There was no qualifying language like: “which is coupled with a guaranteed income for life” or “which is used to calculate a guaranteed income for life payment.”
Who created the ad? This is where it gets really interesting. A marketing organization created the ad.
The lead was purchased from a marketing organization–you getting the picture yet?
-An independent 3rd party marketing company came up with the ad.
-The marketing company put the ad online to generate leads.
-The marketing company sold the leads to insurance agents who wanted to sell FIAs.
But the agent got in trouble and paid a fine?
Yep. As far as I understand the fact pattern, the agent didn’t design the ad or put the ad out there. It was a third party. But because the lead went to the agent, bang, he got hammered.
Lessons to be learned
There are thousands of agents buying leads. Most agents don’t think twice about how the leads are created, they just want them.
So, the lesson to be learned is that it’s no longer good enough to just buy leads. Agents need to do some due diligence on how the leads are being created. Ask the marketing firm if you can see the ads they intend to use to create the leads. At least then you can have some confidence that you won’t be getting contacted by your local DOI with a complaint about misleading ads.
Roccy DeFrancesco, JD