Verdicts & Settlements
From the March 28, 2005 Michigan Lawyers Weekly

CONSUMER CLASS ACTION SETTLES FOR $2.6M

Plaintiff: Telemarketing Program Was Deceptive

Plaintiff Teresa McClain asserted claims on behalf of a class of Michigan consumers alleging that they were induced to purchase accidental death insurance through a false and deceptive telemarketing program.

The plaintiff contended that the defendants purchased the names, phone numbers and bank account numbers of the class members from the class members' banks, then called the class members, holding themselves out to be calling on behalf of the class members' banks.

The plaintiff claimed that, during the phone calls, the defendants misled class members into believing the insurance was "free" and that it was traditional life insurance as opposed to accidental death insurance, which, the plaintiff asserted, had a very limited value.

After class members agreed to purchase the insurance, the defendants withdrew premiums by electronic transfer directly from class members' bank accounts, despite having failed to both provide adequate written disclosure and obtain the necessary written consent.

As part of the settlement, the defendants agreed to refund class members up to five months of premiums, to pay other monetary benefits, and to provide disclosures of the nature of the insurance to those policyholders who continue to own the insurance.

Type of action: Consumer class action

Type of injuries: Payment of premiums for accidental death insurance Name of case: McClain v. Coverdell & Company, et al.

Court/case no./date: U.S. District Court, Eastern District; #00-71881; Nov. 22, 2004
Name of judge: Arthur Tarnow

Settlement amount: $2.6 million

Attorneys for the plaintiff: E. Powell Miller and Marc L. Newman

Attorney for the defendant: Withheld

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