The Office of Financial and Insurance Services released a sample list of actions taken on behalf of Michigan consumers in the last two quarters of 2004. The list is comprised of a series of Commissioners Orders for businesses and individuals operating illegally in Michigan. Each of these actions was taken in response to complaints made by Michigan citizens.
“I take very seriously my role to protect consumers from those who would take advantage of them,” said OFIS Commissioner Linda A. Watters. “There are too many people who try to scam consumers out of their hard-earned money, and OFIS employees are working hard to go after these bad actors.”
Examples of orders released are:
Edward Parks and JE Parks, Inc. had their licenses revoked and were ordered to cease and desist from acting as a licensed insurance agent for violations of law. Parks received payment for insurance but never provided insurance to the consumers and did not refund the money; failed to update insurance information leading to the cancellation of consumer policies without the consumer knowing; charged consumers service fees to place insurance coverage; and lied on his licensee application. Parks also has been convicted of a felony, which disqualifies him from acting as an insurance agent.
The Gentry Group was ordered to cease and desist from transacting insurance business in Michigan without a license. Gentry solicited and sold insurance products to over 100 citizens in Michigan, and solicited seniors by purporting to offer them free advice about living trusts, when in fact it is engaged in the offer and sale of annuities.
The Commissioner can order individuals and businesses to comply with Michigan law and assess sanctions for those who break the law. This can result in a variety of penalties, depending on what kind of financial license the person is operating under. Sanctions typically provide for one level of penalties for violation of statutory standards (i.e. defrauding consumers), and a higher level of fines for violating a cease and desist order (i.e. continuing to defraud consumers after a notice to stop has been given). In addition to cease and desist orders, the commissioner can order revocations, denials, restitutions and consent orders to protect Michigan consumers.
A person in the insurance industry who violates the law forbidding coerced sales could face a civil fine of up to $1,000 for each violation, not to exceed an aggregate civil fine of $30,000. However, if the person violated a cease and desist order and knew or reasonably should have known that he or she was in violation of the order then the civil fine can be up to $25,000 for each violation with an aggregate not to exceed $250,000. The person can also be ordered to provide restitution to those damaged by the violation, ordered to refund monies to cheated consumers, and could face license suspension or revocation.
Watters said, “I hope Michigan residents will look at this list on our website or in the media to see the various schemes and plots that are used to cheat honest citizens out of their hard-earned dollars.”
Anyone who is contacted with a financial or security offer that seems too good to be true should check with OFIS or other reliable sources before giving out bank account, credit card, or any other personal information. OFIS can be reached on the internet at www.michigan.gov/ofis or toll-free at 1-877-999-6442.