Consumer & Insurance Fraud
In our consumer-based economy, working families who purchase products and services must receive truthful information so they can make meaningful choices about how to spend their hard-earned money. When financial institutions, insurance industry participants, and other corporations deceive or take advantage of unequal bargaining power, class action suits provide, in many instances, the only realistic means for an individual to right a corporate wrong.
Robbins Geller attorneys represent consumers around the country in a variety of important and unprecedented complex class actions.
Our attorneys have taken a leading role in many of the largest federal and state consumer fraud cases throughout the United States and are actively involved in many cases relating to banks and the financial services industry, pursuing claims on behalf of individuals victimized by abusive telemarketing practices, abusive mortgage lending practices, market timing violations in the sale of variable annuities, and deceptive consumer credit lending practices in violation of the Truth-In-Lending Act. Read about some of our nationwide consumer cases below.
Bank Overdraft Fees Litigation. The banking industry charges consumers exorbitant amounts for “overdraft” of their checking accounts, even if the customer did not authorize a charge beyond the available balance and even if they would not have overdrawn the account if the transactions were ordered chronologically as they occurred – that is, banks reorder transactions to maximize such fees. Americans reportedly spent more money on bank overdraft fees than on vegetables last year. Robbins Geller has brought lawsuits against major banks to stop this practice and recover the hundreds of millions, if not billions, of dollars in overdraft fees. We are investigating other banks that engage in this practice. Contact: Bonny Sweeney (email@example.com).
Vertrue Sales and Marketing Practices Litigation. Telemarketing companies use a deceptive telemarketing practice they call “upselling.” In the Vertrue Sales Practices Litigation, after purchasing products (including Nad’s, vitamins, knives, Q-Ray bracelets, Edgemaster paint roller, Simoniz car washer, flowers, dance videos, AB Slider, ultrasonic toothbrushes and OxiClean) via an infomercial, consumers were told they were being sent a free 30-day trial membership in an unrelated buying club. Those consumers who did not refuse the 30-day membership were charged between $60 and $150 annually for this so-called “gift.” We have filed suit in 21 states. Contact: Chris Collins (firstname.lastname@example.org).
Chase Bank Home Equity Line of Credit Litigation. In October 2008, after receiving $25 billion in TARP funding to encourage lending institutions to provide businesses and consumers with access to credit, Chase Bank began unilaterally suspending its customers’ home equity lines of credit. Plaintiffs charge that Chase Bank did so using an unreliable computer model that did not reliably estimate the actual value of its customers’ homes in breach of the borrowers’ contracts. The Firm has brought a lawsuit to secure damages on behalf of borrowers whose credit lines were improperly suspended. Contact: Chris Collins (email@example.com).
Pacific Gas & Electric Trespass Litigation. Robbins Geller attorneys have filed suit on behalf of property owners alleging that PG&E has trespassed on their land. In short, PG&E has electricity easements giving them access for the purposes of building towers and stringing lines related to the transmission of electricity. PG&E has recently installed a fiber-optic telecommunications network which it has leased to telephone and Internet services, despite the fact that the electricity easements do not allow PG&E to use plaintiffs’ property to engage in general telecommunications business. Through their lawsuit, plaintiffs seek damages to compensate them for PG&E’s trespass. Contact: Chris Collins (firstname.lastname@example.org).
Our consumer class settlements have helped remedy many abuses.
Visa and MasterCard Fees. After years of litigation and a six-month trial, Robbins Geller attorneys won one of the largest consumer-protection verdicts ever awarded in the United States. The Firm’s attorneys represented California consumers in an action against Visa and MasterCard for intentionally imposing and concealing a fee from cardholders. The court ordered Visa and MasterCard to return $800,000,000 in cardholder losses, which represented 100% of the amount illegally taken, plus 2% interest. In addition, the court ordered full disclosure of the hidden fee.
Drivers’ Privacy Case. In a cutting-edge consumer case, Robbins Geller attorneys brought a case on behalf of a half-million Florida drivers against a national bank for purchasing their private information from the state department of motor vehicles for marketing purposes. After years of litigation that included appeals to the United States Supreme Court, the Firm’s attorneys successfully negotiated a $50 million all-cash settlement in this cutting-edge case involving consumer privacy rights. The published decision in Kehoe v. Fidelity Fed. Bank & Trust, 421 F.3d 1209 (11th Cir. 2005), cert. denied, 547 U.S. 1051 (2006), one of the first opinions construing the Federal Drivers Privacy Protection Act, was a victory for Robbins Gellers' clients.
LifeScan Diabetic Systems. Robbins Geller attorneys were responsible for achieving a $45 million all cash settlement with Johnson & Johnson and its wholly owned subsidiary, LifeScan, Inc., over claims that LifeScan deceptively marketed and sold a defective blood-glucose monitoring system for diabetics. The LifeScan settlement was noted by the court as providing “exceptional results” for members of the class.
West Telemarketing Case. Robbins Geller attorneys secured a $39 million settlement for class members caught up in a telemarketing scheme where consumers were charged for an unwanted membership program after purchasing Tae-Bo exercise videos. Under the settlement, consumers were entitled to claim between one and one-half to three times the amount of all fees they unknowingly paid.
Dannon Activia®. Robbins Geller attorneys secured the largest ever settlement for a false advertising case involving a food product. The case alleged that Dannon’s advertising for its Activia® and DanActive® branded products and their benefits from “probiotic” bacteria were overstated. As part of the nationwide settlement, Dannon agreed to modify its advertising and establish a fund of up to $45 million to compensate consumers for their purchases of Activia® and DanActive®.
Out-of-Network Emergency Room Doctors. In a case that changed the way out-of-network emergency room physicians are paid by insurance carriers in Florida, Robbins Geller successfully represented a class of physicians who claimed their reimbursements for emergency services were unfair. As a result of the case, these physicians were guaranteed approximately double the rate of reimbursement they received prior to the case being pursued, resulting in a recovery of nearly $20 million and important business reforms.
Mattel Lead Paint Toys. In 2006-2007, toy manufacturing giant, Mattel and its subsidiary Fisher-Price, announced the recall of over 14 million toys made in China due to hazardous lead and dangerous magnets. Robbins Geller attorneys filed lawsuits on behalf of millions of parents and other consumers who purchased or received toys for children that were marketed as safe but were later recalled because they were dangerous. The Firm’s attorneys reached a landmark settlement for millions of dollars in refunds and lead testing reimbursements, as well as important testing requirements to ensure that Mattel’s toys are safe for consumers in the future. If you purchased or received a Mattel toy between the years 2002-2007, please visit www.MattelSettlement.com, or contact Rachel Jensen (email@example.com).
Tenet Healthcare Cases. Robbins Geller attorneys were co-lead counsel in a class action alleging a fraudulent scheme of corporate misconduct, resulting in the overcharging of uninsured patients by the Tenet chain of hospitals. The Firm’s attorneys represented uninsured patients of Tenet hospitals nationwide who were overcharged by Tenet’s admittedly “aggressive pricing strategy,” which resulted in price gouging of the uninsured. The case was settled with Tenet changing its practices and making refunds to patients.
Robbins Geller has played a critical role in protecting the rights of individual insureds, schools, counties, and states against insurance fraud and other unfair and illegal business practices within the insurance industry. Our insurance practice attorneys have recovered over $10 billion.
Fraud and collusion in the insurance industry by executives, agents, brokers, lenders and others is one of the most costly crimes in the United States. Some experts have estimated the annual cost of white collar crime in the insurance industry to be over $120 billion nationally.
Bid-Rigging. Robbins Geller attorneys were among the first to expose illegal and improper bid-rigging and kickbacks between insurance companies and brokers. The Firm is a leader in representing businesses, individuals, school districts, counties, and the State of California in numerous actions in state and federal courts nationwide to stop these practices. The Firm has helped recover over $200 million for victims of improper bid-rigging and kickbacks by insurers.
Race Discrimination. Robbins Geller attorneys have long been at the forefront of litigating race discrimination issues within the life insurance industry. For example, the Firm has fought the practice by certain insurers of charging African-Americans and other people of color more for life insurance than similarly situated Caucasians. The Firm recovered over $400 million for African-Americans and other minorities as redress for civil rights abuses, including landmark recoveries in McNeil v. American General Life & Accident Insurance Company; Thompson v. Metropolitan Life Insurance Company; and Williams v. United Insurance Company of America.
Representing The Elderly – Senior Annuities. The Firm’s attorneys fight on behalf of elderly victims targeted for the sale of deferred annuity products with hidden sales loads and illusory bonus features. Sales agents for life insurance companies such as Allianz Life Insurance Company of North America, Midland National Life Insurance Company, and National Western Life Insurance Company have targeted senior citizens for these annuities with lengthy investment horizons and high sales commissions. The Firm has recovered millions of dollars for elderly victims and seeks to ensure that senior citizens are afforded full and accurate information regarding deferred annuities.
These annuities and their high costs are particularly harmful to seniors because they do not mature for 15 or 20 years, often beyond the elderly person's life expectancy. Also, they carry exorbitant surrender charges if cashed in before they mature. As a result, the annuitant's money is locked up for years, and the victims or their loved ones are forced to pay high surrender charges if they need to get it out early. Nevertheless, many companies and their sales agents intentionally target the elderly for their deferred annuity products, holding seminars in retirement centers and nursing homes, and through pretexts such as wills and estate planning or financial advice. The Firm has filed lawsuits against a number of life insurance companies, including Allianz Life Insurance Company of North America, Midland National Life Insurance Company and Jackson National Insurance Company, in connection with the marketing and sales of deferred annuities to senior citizens. We are investigating similar practices by other companies. Information that you have may be valuable so please contact us by filling out the form below. Contact: Ted Pintar (firstname.lastname@example.org) or Rachel Jensen (email@example.com).
"Vanishing Premium" Cases. Robbins Geller attorneys also stopped the fraudulent sale of life insurance policies based on misrepresentations about how the life insurance policy would perform, the costs of the policy, and whether premiums would “vanish.” Purchasers were also misled about the financing of a new life insurance policy, falling victim to a “replacement” or “churning” sales scheme where they were convinced to use loans, partial surrenders or withdrawals of cash values from an existing permanent life insurance policy to purchase a new policy. Read more about some of our insurance cases below.
Brokerage “Pay to Play” Cases. On behalf of individuals, governmental entities, businesses and non-profits, Robbins Geller has sued the largest commercial and employee benefit insurance brokers and insurers for unfair and deceptive business practices. While purporting to provide independent, unbiased advice as to the best policy, the brokers failed to adequately disclose that they had entered into separate “pay to play” agreements with certain third-party insurance companies. These agreements provide additional compensation to the brokers based on such factors as profitability, growth and the volume of insurance that they place with a particular insurer, and are akin to a profit-sharing arrangement between the brokers and the insurance companies. These agreements create a conflict of interest since the brokers have a direct financial interest in selling their customers only the insurance products offered by those insurance companies with which the brokers have such agreements.
Robbins Geller attorneys were among the first to uncover and pursue the allegations of these practices in the insurance industry in both state and federal courts. On behalf of the California Insurance Commissioner, the Firm brought an injunctive case against the biggest employee benefit insurers and local San Diego brokerage, ULR, which resulted in major changes to the way they did business. The Firm also sued on behalf of the City and County of San Francisco to recover losses due to these practices. Robbins Geller attorneys have obtained over $200 million for victims of pay-to-play practices and have been instrumental in enactment of landmark business reforms. Contact: Rachel Jensen (firstname.lastname@example.org).
Discriminatory Credit Scoring and Redlining. Robbins Geller attorneys have prosecuted cases concerning countrywide schemes of alleged discrimination carried out by Nationwide, Allstate and other insurance companies against African-American and other persons of color who are purchasers of homeowner and automobile insurance policies. Such discrimination includes alleged redlining and the improper use of “credit scores,” which disparately impact minority communities. Plaintiffs in these actions have alleged that the insurance companies’ corporate driven scheme of intentional racial discrimination includes refusing coverage and/or charging them higher premiums for homeowners and automobile insurance. On behalf of the class of aggrieved policyholders, the Firm has recovered over $400 million for these predatory and racist policies. Contact: Ted Pintar (email@example.com).
State Farm. State Farm and other automobile insurance companies in California have illegally charged monthly policyholders more premiums than they are required to pay. Because automobile insurance is required under law, it is closely regulated. State Farm and others bring in millions of dollars each year by concealing up front that policyholders must pay an extra charge if they opt for a monthly plan, and they later tack on the extra charge without revealing it as a premium as they must do under state law. Robbins Geller attorneys have fought this practice, recovering millions of dollars on behalf of policyholders. Contact: Rachel Jensen (firstname.lastname@example.org).
Robbins Geller's consumer and insurance practices have brought about positive change for our clients and the classes they represent in many areas of life, including some in which you might not imagine.
We have taken a leading role in many of the largest federal and state, consumer and insurance fraud cases on record, including:
- Securing the largest settlement on record for a false advertising case involving a food product, Dannon’s Activia® and DanActive® yogurt brands
- Recovering millions of dollars in refunds and lead testing reimbursements, and obtaining testing requirements to ensure that Mattel’s toys are safe in the future
- Recovering more than $10 billion for consumers defrauded by illegal and improper bid-rigging and kickbacks between insurance companies, as well as insurance company deceptive and discriminatory practices
- Representing classes of elderly victims targeted for the sale of deferred annuity products with hidden sales loads and illusory bonus features, resulting in recoveries of millions of dollars as well as new laws regulating the provision of full and accurate information
- Litigating race discrimination issues within the life insurance industry, including recovery of more than $400 million for African-Americans and other minorities as redress for civil rights abuses
- Representing classes of individuals victimized by abusive telemarketing practices, mortgage lending practices, market timing violations in the sale of variable annuities, and deceptive consumer credit lending practices in violation of the Truth-In-Lending Act
- Recovering millions of dollars in illegal “check overdraft” fees for classes of bank customers