They tried to get my agency involved, I threw them out the door. When I asked them to leave they started the hard sell, “this will be your only chance on this deal” etc.. With that I lef the room and asked my office to call security. If was crap from the begining and if you “steped in it” then shame on you. Don’t cry now.
True, the model was bad. They did sell agencies at an inflated price, charged too much interest on the notes, and had unrealistic franchise fees. However, shouldn’t the prospective buyers have known this? Or is this similiar to the mortgage crisis: “I didn’t understand what the loan officer told me and I thought I could pay the big monthly note since they told me I could”.
I am a former agent that has lost $480,000 in commissions. Targeting them for Racketeering may be a little off base although they did often “markup” the newly purchased agency price in reselling it to the new franchise buyer. Often however, the purchasing agent knew this; I did.
However, the serious fraud, in my opinion, is
1. Their maintaining verbally and in print that the “agent commissions” were held in escrow in a non-Brooke bank indicating the portion due franchisees was safe from all Brooke creditors, including securitized lendors. The latest statement in print was in the Brook magazine (sales piece) distributed at the 2007 Las Vegas convention. I have original publications. Without that assurance, I would never have purchased the first franchise in 2002.
Some ins cos, such as Travelers, are STILL paying failed Brooke my renewal commission 6 months later.
2. Brooke did not pay the full commission being received on all contracts. Per the franchise agreement, agents were to receive all commissions with Brooke retaining all awards, bonuses and 15% (only) of the gross commission.
3. In 6/2007 I purchased a failed Brooke franchise being run by a Brooke manager after being assured all bad policies, ins co non-renewals and pending cancellations had been completed. (I owned 2 others 5 years earlier). In fact there was a known contract cancellation by Hartford and others. I expended 6 mos of an employee’s time trying to replace those but had no market for most. I lost $90,000 in assured income the first year.
At a 1% “skimming” of commission and $7,000,000 premium/yr x 7 years = $490,000 they took from me. This is in addition to the $480,000 they (and the Banks)kept since the August 2008 closure and the 2007 agency purchase $90,000 loss. With the time value of money, Brooke took well over $1,000,000 from me.
Interestingly, none of the lawyers I contacted indicated they could get anything back.
How many new Farmers agents or Allstate agents have failed over the past 3 to 5 years. How much money have they lost? I don’t mean Allstate and Farmers but the people who are convinced to invest their time and money with an extremely high failure rate. Allstate and Farmers is out little money and retain the business the agencies wrote before they failed.
Brooke appears to have been a pyramid scheme while Allstate and Farmers don’t appear to do anything illegal although possibly unethical.
TO THE UNTOUCHABLES. Edward B. Rust, Jr., will be happy to tell you that he is the Chief Executive Officer of State Farm Mutual Insurance Company. He has deep family ties to State Farm, as his father and grand father have both served in that capacity. He will also tell you that he is an educated man who has been to law school and is a past practicing attorney. In addition, he was the chairman of the Coalition for Excellence in Education and a member of George W. Bush’s transition advisory team on education. So with all of that education why will he not deal with his company’s inbred greed. Does he not know that we are in the 21st century where anyone can look on the internet and see the billions of dollars that are being spent to protect their empire from the consumer? In Utah, the company was fine $25 million in punitive damages, in part for the “systematic destruction of documents and systematic manipulation of individual claim files to conceal claim mishandling”. An Idaho appeals court fined the company $9.5 million in punitive damages for making use of “a completely bogus” outside bill review company that helped lower the cost of medical bills. In October of 1999, an Illinois jury rendered a $456 million judgment against State Farm and an additional $730 million in punitive damages for the insurer’s breach of contract with auto policy holders by relying on generic replacement parts. Rust was adamant in his insistence that fraud had not been committed. A class action law suit in the name of State Farm policy holders was filed in 2003 for breach of contract and statutory consumer fraud in which $1.1 billion was awarded to plaintiffs. When a company is misleading the public, should that not be considered fraud? A consumer would go to prison for that type of behavior. State Farm will let you know that, in several states, fraud and abuse is pushing up the cost of auto insurance. A court in late 2001 reached an unfriendly consumer decision that could have the effect of reaching deep into the pockets of the consumer. Sharply higher jury awards in vehicular liability cases are putting additional upward pressure on auto insurance rates. The average jury award in auto liability cases rose from $187,000 to $269,000 in 2000, an increase of 44%. I question if any of the lawsuits would be necessary if the company would just fairly pay their claims. The company represents on their web-site that consumer protection is one of their most important goals, but do they really think that courts would be awarding multiple millions of dollars in bad faith claims if that were their emphasis? State Farm’s ratings are based on their financial strength. State Farm states that their high ratings are also based on strong claims paying ability. With this ability, why is it necessary for their policy holders to allege that the claims department was directed, in evaluating their cases, to take them to trial instead of settling within the limits of the policy? This practice exposed policyholders to judgments above the limits of their policies, when the company was attempting to make an effort to win smaller decisions. Two former in-house attorneys for State Farm contend that they were often called upon by the insurer to represent its’ policy holders and were forced to commit “unlawful and unethical activities, including requiring the two to stay silent about the rights of the policyholders”. State Farm seems to have reckless indifference for the truth for the purpose of corporate and personal economic gain. State Farm should know that continued scrutiny of their claims paying practices will continue especially with the advent of new claims that are surfacing from lawsuits revolving around Hurricane Katrina. A message to Mr. Rust, and any employee of the company that is acting in bad faith for its policy holders. Its time to stop no more.
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They tried to get my agency involved, I threw them out the door. When I asked them to leave they started the hard sell, “this will be your only chance on this deal” etc.. With that I lef the room and asked my office to call security. If was crap from the begining and if you “steped in it” then shame on you. Don’t cry now.
Wow – Ya think?
True, the model was bad. They did sell agencies at an inflated price, charged too much interest on the notes, and had unrealistic franchise fees. However, shouldn’t the prospective buyers have known this? Or is this similiar to the mortgage crisis: “I didn’t understand what the loan officer told me and I thought I could pay the big monthly note since they told me I could”.
I am a former agent that has lost $480,000 in commissions. Targeting them for Racketeering may be a little off base although they did often “markup” the newly purchased agency price in reselling it to the new franchise buyer. Often however, the purchasing agent knew this; I did.
However, the serious fraud, in my opinion, is
1. Their maintaining verbally and in print that the “agent commissions” were held in escrow in a non-Brooke bank indicating the portion due franchisees was safe from all Brooke creditors, including securitized lendors. The latest statement in print was in the Brook magazine (sales piece) distributed at the 2007 Las Vegas convention. I have original publications. Without that assurance, I would never have purchased the first franchise in 2002.
Some ins cos, such as Travelers, are STILL paying failed Brooke my renewal commission 6 months later.
2. Brooke did not pay the full commission being received on all contracts. Per the franchise agreement, agents were to receive all commissions with Brooke retaining all awards, bonuses and 15% (only) of the gross commission.
3. In 6/2007 I purchased a failed Brooke franchise being run by a Brooke manager after being assured all bad policies, ins co non-renewals and pending cancellations had been completed. (I owned 2 others 5 years earlier). In fact there was a known contract cancellation by Hartford and others. I expended 6 mos of an employee’s time trying to replace those but had no market for most. I lost $90,000 in assured income the first year.
At a 1% “skimming” of commission and $7,000,000 premium/yr x 7 years = $490,000 they took from me. This is in addition to the $480,000 they (and the Banks)kept since the August 2008 closure and the 2007 agency purchase $90,000 loss. With the time value of money, Brooke took well over $1,000,000 from me.
Interestingly, none of the lawyers I contacted indicated they could get anything back.
Dude…that stinks…
Problem is, the lawyers are right. It’s like the old expression… blood from a rock?
How many new Farmers agents or Allstate agents have failed over the past 3 to 5 years. How much money have they lost? I don’t mean Allstate and Farmers but the people who are convinced to invest their time and money with an extremely high failure rate. Allstate and Farmers is out little money and retain the business the agencies wrote before they failed.
Brooke appears to have been a pyramid scheme while Allstate and Farmers don’t appear to do anything illegal although possibly unethical.
Please provide information on how to join this law suite.
Consumer
Consumer Protection Act,. run not by the federal regulators but by Consumer.
TO THE UNTOUCHABLES. Edward B. Rust, Jr., will be happy to tell you that he is the Chief Executive Officer of State Farm Mutual Insurance Company. He has deep family ties to State Farm, as his father and grand father have both served in that capacity. He will also tell you that he is an educated man who has been to law school and is a past practicing attorney. In addition, he was the chairman of the Coalition for Excellence in Education and a member of George W. Bush’s transition advisory team on education. So with all of that education why will he not deal with his company’s inbred greed. Does he not know that we are in the 21st century where anyone can look on the internet and see the billions of dollars that are being spent to protect their empire from the consumer? In Utah, the company was fine $25 million in punitive damages, in part for the “systematic destruction of documents and systematic manipulation of individual claim files to conceal claim mishandling”. An Idaho appeals court fined the company $9.5 million in punitive damages for making use of “a completely bogus” outside bill review company that helped lower the cost of medical bills. In October of 1999, an Illinois jury rendered a $456 million judgment against State Farm and an additional $730 million in punitive damages for the insurer’s breach of contract with auto policy holders by relying on generic replacement parts. Rust was adamant in his insistence that fraud had not been committed. A class action law suit in the name of State Farm policy holders was filed in 2003 for breach of contract and statutory consumer fraud in which $1.1 billion was awarded to plaintiffs. When a company is misleading the public, should that not be considered fraud? A consumer would go to prison for that type of behavior. State Farm will let you know that, in several states, fraud and abuse is pushing up the cost of auto insurance. A court in late 2001 reached an unfriendly consumer decision that could have the effect of reaching deep into the pockets of the consumer. Sharply higher jury awards in vehicular liability cases are putting additional upward pressure on auto insurance rates. The average jury award in auto liability cases rose from $187,000 to $269,000 in 2000, an increase of 44%. I question if any of the lawsuits would be necessary if the company would just fairly pay their claims. The company represents on their web-site that consumer protection is one of their most important goals, but do they really think that courts would be awarding multiple millions of dollars in bad faith claims if that were their emphasis? State Farm’s ratings are based on their financial strength. State Farm states that their high ratings are also based on strong claims paying ability. With this ability, why is it necessary for their policy holders to allege that the claims department was directed, in evaluating their cases, to take them to trial instead of settling within the limits of the policy? This practice exposed policyholders to judgments above the limits of their policies, when the company was attempting to make an effort to win smaller decisions. Two former in-house attorneys for State Farm contend that they were often called upon by the insurer to represent its’ policy holders and were forced to commit “unlawful and unethical activities, including requiring the two to stay silent about the rights of the policyholders”. State Farm seems to have reckless indifference for the truth for the purpose of corporate and personal economic gain. State Farm should know that continued scrutiny of their claims paying practices will continue especially with the advent of new claims that are surfacing from lawsuits revolving around Hurricane Katrina. A message to Mr. Rust, and any employee of the company that is acting in bad faith for its policy holders. Its time to stop no more.