Here is a side of AIG of which you might not be aware. I assist with the care and finances of an 88-year-old relative who has Alzheimer’s disease. When I assumed this role, her finances were in disorder, and she had been scammed financially by various people who prey on the elderly, an all too common situation.
And one of the scammers was AIG. When I reviewed my relative’s bank statements, I noted a monthly debit from her bank account at for $18.95 identified as “AIG.” After taking care of some bigger problems, I finally got around to calling the phone number identifying this charge to find out what it was.
I was told that it was accident insurance. I replied that my relative had no car and had not driven for many years. The AIG representative said that it wasn’t that kind of accident insurance, but it would protect her if she was injured riding in a car or crossing the street. I replied that typically the auto owner’s insurance policy or her own healthcare coverage would cover that, wouldn’t it?
So I asked how my relative came to have this insurance. AIG said that it was because she was a valued client of her bank. Huh, I said?
So AIG had phoned this mentally incapacitated elderly woman, asked her if she wanted to be protected against being injured, and when she said “yes,” started automatically debiting her bank account. No policy was signed, no paperwork changed hands, and she didn’t directly make any payment to start this coverage. If her bank allowed AIG to do this, then it is at fault for sharing my relative’s private banking information with them.
I provided AIG with medical documentation of my relative’s Alzheimer’s dementia, and asked them to refund the several hundred dollars they had charged her for these premiums over the past couple of years. They replied that they would stop the coverage, but not refund the premiums because she had consented to the coverage, something of a contradiction since I had documented that she was mentally incapacitated. AIG hoped that I was satisfied with this answer. I was not.
I tell this story for two reasons. First, to give further evidence of what kind of a company AIG is. And second, to illustrate the kind of free-wheeling business practices on which their financial model has been based. This kind of insurance scam is the equivalent for the insurance industry of the sub-prime mortgage practices in the lending industry. It is not a solid basis for business growth and has led to inflated concepts of their market and company prospects, which then pull the whole economy down when they are deflated.
Finally, further regulation of company practices is needed when it comes to financial scams on the elderly. A company should be barred from marketing this kind of product to people over a certain age and from instituting a policy without the consent of a mentally competent friend or relative. And they should certainly be barred from starting to directly debit an elderly person’s bank account.
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