Massachusetts Attorney General Maura Healy
Massachusetts seniors will receive refunds as a result of a recent settlement with a mortgage broker, its employee and an insurance agent, Attorney General Maura Healey announced yesterday.
This settlement resolves allegations from a lawsuit filed by Healey in August 2015 against mortgage broker Direct Finance Corp., its employee Daniel Matthews and insurance agent James Moniz, alleging that they induced elderly clients to take out reverse mortgages and invest the proceeds in unsuitable variable annuities.
“We found that these defendants took advantage of elderly homeowners who spent decades building equity in their homes,” Healey said in a statement.
The AG’s lawsuit alleged that while employed by John Hancock Life Insurance Co., Moniz developed an association with Matthews to induce elderly clients to take out reverse mortgages through Direct Finance and invest the proceeds in unsuitable variable annuities. John Hancock fired Moniz for conduct uncovered during the investigation.
Affected consumers will be contacted and will receive a total of $137,500 in refunds that will be distributed by the AG’s office.
In addition to monetary relief, the settlement imposes restrictions on Moniz, Matthews and Direct Finance to prevent improper association between the origination of reverse mortgages and the investment of the proceeds in annuities or other investment products. The defendants are also prohibited from misrepresenting the sources of investments or investment intentions of their clients.
The AG’s office previously settled allegations with John Hancock that it unfairly failed to effectively supervise Moniz, permitting him to sell unsuitable variable life insurance policies, variable annuities and other insurance and financial products. John Hancock paid nearly $900,000 to seniors in Massachusetts in September 2014 to resolve those allegations.
Consumers seeking more information can contact the Attorney General’s Insurance and Financial Services Division at 1-888-830-6277.
