Associated Press

RALEIGH, N.C. - Two California-based financial services companies took hundreds of thousands of dollars from senior citizens through deceptive tactics, state Attorney General Roy Cooper said Monday in a lawsuit brought against the companies.

Cooper alleged that agents at American Family Prepaid Legal Corp. and Heritage Marketing and Insurance Services Inc. aggressively coerced elderly individuals to buy living trusts and annuities, even if those investments didn't fit the customers' needs.

The two affiliated companies are based in Irvine, Calif., and share a regional office in Greensboro.

"These companies are preying on seniors, bullying them into spending thousands of dollars on trusts they don't need and investments that don't help them," Cooper said. "We must put a stop to this scheme now, before any more of our seniors get hurt."

Cooper cited one case in which a Heritage agent took a 70-year-old woman to the bank so that she could withdraw her entire life savings of $29,000 - money she needed to pay for 15 different medications - to purchase an annuity. Company agents also discouraged customers from consulting with an attorney or family members and company agents misrepresented facts, the lawsuit alleges.

The attorney general asked the court to halt the deceptive tactics, levy civil penalties against the companies and provide refunds to consumers.

A spokesman for American Family Legal Plan said the company has angered lawyers and financial planners - not consumers - by offering group-discounted legal services.

"That is why we believe we are seeing legal action taken against prepaid legal services providers not at the behest of consumers but of other lawyers," spokesman Gregory J. Shebest said in a statement. "We stand behind the affordable, quality service we have provided for thousands of clients in North Carolina and throughout the U.S."

Seniors and family members have filed 23 written complaints about American Family and Heritage, according to the state attorney general's office.

Shebest said the company was aware of 27 consumer complaints, all which the company believes were answered to the satisfaction of both the attorney general and the complainants.

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