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Iowa Regulators Monitor Transamerica As Customer Complaints Mount

Gazette (Cedar Rapids, IA)

Transamerica Corp. is under review by the Iowa Insurance Division for a rash of complaints related to the company's taking over customer service for Vanguard Annuity in December.

People who complained to the Insurance Division or the Iowa Attorney General said they couldn't get through to Transamerica, an investment, retirement and life insurance company, to check on their investments, make transfers or seek payouts after the death of a loved one.

"I want to know if this company still is solvent," William Heiter, of Mobile, Ala., wrote in a Jan. 4 complaint to the Iowa Attorney General. "I have tried to contact them numerous times, spending well over THREE (3) HOURS waiting ON HOLD (including over 1 hour today) to speak to someone, but thus far I've been able to speak to NO ONE at Transamerica."

Sheri Stewart, a Cedar Rapids native who now lives in Doniphan, Mo., couldn't get through to Transamerica in February to find out about her father's death benefit, which she needed to settle his estate, she told The Gazette earlier this month.

"I never could get through to talk with a human," Stewart said. "What finally got me through was I stopped payment on his automatic payment.

"They said they were going to cancel his policy and there was a (phone) number on there. I was on hold for a while but I finally got through."

Stewart didn't get the issue resolved until April, she said.

Verabeth Bricker, 94, of Victor, just wanted to see a breakdown of the benefits of her life insurance policy. The monthly premiums had more than doubled, and Bricker was trying to decide whether it was worth it to keep the policy, Beth Henning, Bricker's friend and helper, told The Gazette.

Transamerica wouldn't give Bricker the benefits illustration until she paid $2,400 for three months of premiums, Henning said.

"I call that blackmail," Bricker added.

Her lawyer filed a complaint on her behalf to the Iowa AG.

Complaints escalate

Although customer service complaints aren't unusual — especially for a large multinational company — gripes about Transamerica went up in January after Transamerica took over customer service for the Vanguard Variable Annuity block of business, said Chance McElhaney, spokesman for the Iowa Insurance Division.

"The IID noted increased call volume in January 2021 from consumers seeking information about Transamerica and their Vanguard Annuity," he said.

"The Iowa Insurance Division has communicated with Transamerica in regards to the customer service issues and is monitoring its progress as it works through the transition of the customer service function from Vanguard to Transamerica customers service."

The Iowa AG's office reported having six complaints about Transamerica since Dec. 1. The Iowa Insurance Division would not say how many formal complaints it has received, but said office staff also has fielded phone calls about Transamerica that did not turn into formal complaints.

For some longtime Vanguard customers, the transfer of their business to Transamerica was disappointing and disturbing.

Vanguard founder John Bogle started the first index fund, the Vanguard Fund, in 1975. The investment adviser has continued to be popular because it offers low-cost, low-maintenance investing. In a 2018 Harris Poll, Vanguard was one of the only financial services companies recognized for its strong brand, Forbes reported.

Geo Mayer, 83, of Tampa, Fla., who is retired from the international construction business, at one time had as much as $15 million invested with Vanguard.

But after Transamerica took over the Variable Annuity block in December, Mayer no longer could make fund transfers by phone and saw that some online information about his account — such as the name of his primary beneficiary — was inaccurate, he said. Mayer said he asked Transamerica on Jan. 7 to send him a check for $20,000, which should have been done within a day or two. When he didn't have it by Jan. 21, he asked for a wire transfer, which happened Jan. 26, Mayer said.

"I have been unable to receive an explanation for the unacceptable and costly delays," he said.

Transamerica response

In response to questions from The Gazette, Transamerica apologized for customer service delays.

"We are actively working to make things right for our customers," a company spokesman responded in a May 5 email. "We have several resolution steps underway, including adding more customer care staff and cross-training additional staff. We also enhanced communications to Transamerica VVA customers through Transamerica's website.

"We assure our customers that their accounts are safe, and that information regarding Transamerica's ratings and financial strength is publicly available via our website. In 2020, Transamerica fulfilled its promises to customers, paying more than $49 billion in insurance, retirement and annuity claims and benefits, including return of annuity premiums paid by the customer."

Transamerica, a subsidiary of AEGON, a life insurance company based in the Netherlands, has been scaling back its Cedar Rapids operations in recent years.

The company laid off 53 Cedar Rapids employees in November and in March put six Cedar Rapids buildings up for sale as it consolidated operations on C Street SW. A company spokeswoman said earlier this month said there are 2,700 employees in Cedar Rapids.

In 2018, Transamerica signed a $2 billion deal with India-based Tata Consultancy Services that was supposed to "rapidly enhance its digital capabilities, simplify the service of more than 10 million policies into a single integrated modern platform, and drive greater sustainable growth opportunities through superior customer experiences," according to a news release from Tata.

Transamerica is scheduled for trial in September in the northern district of U.S. District Court in a class-action lawsuit filed in 2019 by employees who say the company mismanaged the 401(k) investments, costing employees retirement income.

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