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Tuesday, October 15, 2019

Washington state accuses Texas firm of operating 'trust mill'

By Marian Johns | Mar 16, 2018

OLYMPIA, Wash. — Washington Attorney General Bob Ferguson has filed suit against CLA Estate Services, Inc and CLA USA Inc,. alleging they operated a "trust mill" that led to persuading seniors into purchasing high-commission insurance products.

The consumer protection lawsuit recently filed by Furguson alleges the Texas company mislead seniors by offering a "free lunch" if they attended an estate planning workshop where CLA salespeople persuaded attendees to establish living trusts by purchasing the company's "Lifetime Estate Plan." According to the lawsuit, CLA would then get detailed financial information from participants and use that to sell complex financial products that the seniors did not understand. 

According to the attorney general, the estate plan packages actually were a referral to an attorney. The plan also included annual meetings that were supposed to be for reviewing the client's estate plans but actually were with insurance agents posing as investment advisers who tried to sell annuities and life insurance.  CLA did not disclose their products could freeze seniors' assets for years and also include severe penalties for early withdrawal. 

“CLA’s business model is a classic ‘trust mill’ scheme,” Ferguson said in a statement. “The company made a profit off deceptively marketing estate planning and financial products to retirement-age Washington consumers. I am holding individuals and businesses that prey on seniors accountable."  

According to the attorney general, CLA held more than 700 "free lunch" seminars which were attended by more than 11,000 people in Washington state. 

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Washington State Attorney General