Iowa Insurance Agents Fined For ‘Deceptive’ Mailers Targeting Elderly

By John Hilton

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 [email protected]. Follow him on Twitter @INNJohnH.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.