I was a young recruit in the military and learned my lesson about the sharks circling the bases eager to get their cut of the soldier's pay almost right away. They prey on the dreams and hopes of young servicemembers. One was a company that lured sailors into a hotel room and used high pressure sales tactics to sell "College Education Preparation and Guidance" as salvation from a life of toil (hey that resonates with an E-1 or E-2) which turned out to be outdated Encyclopedias (tell me where a sailor overseas is going to keep a set of encyclopedias! In his rack? Or a marine - in his pack or foot locker? Ha.). Another scam around the bases was the "Photography Club" which offered lifetime film processing of those pictures of overseas adventures, preserving them forever. Problem was they would fold a year later.
Now, this American Amicable / Pioneer phenomenon is not as brazen or scammish as the others - they do sell you something - but the buyer is too often not aware what they are buying - insurance. And they are not aware that what they are buying is outrageously overpriced compared to other stuff they could buy. They get bamboozled by slick sales teams in rented office spaces near hangouts for young military guys - the Horton Plaza area in downtown San Diego has always been a big one for example.
This was the first and last scam I fell for but unfortunately not the last time I saw this and other companies trying to scam young new sailors and marines right around the base. They used to use pretty women to flirt with men and lead them to an office where they would then disappear and leave you with the hard sellers. They would show you books and charts and schedules to convince you that you might have a chance to make something of yourself if you buy their annuities which would be worth millions by retirement. They would play on your military training by using appeals to authority and other tricks, and get you to fill out paperwork to take to personnel to garnish your paycheck. Once deployed overseas, I realized that what I was investing a large chunk of my monthly paycheck in was in fact life insurance (it took me a long time to get an appointment with a JAG lawyer who explained this to me and a little while longer to get it removed from my financial file). The military already offered great insurance to its men and women, so American Amicable had to gussy up its insurance as "an investment", going so far as to call their product "Wealth Builder".
American Amicable Insurance IN FACT lost in a class action lawsuit against them which was final in 2006 and had to pay back money to the people who were taken in. I missed the deadline by the time I heard about this and talking to them on the phone again was an experience in itself. They were very guarded and clever when I called them to update my address in response to this news of the settlement:
http://www.military.com/military-report/insurance-companies-owe-servicemembers
And the guy on the phone said haughtily/snidely, "there would be no reason to do that" (really weird since most companies would LOVE to reaffiliate with an old customer and bring the account back to life, starting with updated info - have you ever seen a business NOT want more information about a customer? I haven't.).
Unfortunately this company's massive wealth and riches continue to amass because they keep themselves separated from what may be many free agents who peddle their products inside and outside military bases nationwide. As their reputation gets worse, they are starting another company under another name "Pioneer Investments".
For more facts see the article in Money Magazine's January issue article "Suckering Soldiers: misrepresenting life insurance as a savvy investment". Soon after the management of AA was called to testify before congress, and they lost the class action. Unfortunately many people did not know about the class action and missed out on getting a refund.
It makes me angry that this stuff has been going back as far as 1994 when it happened to me and reportedly since the 1980s. The insurance industry should pressure its uglier members like American Amicable to behave better before the government steps in and does the regulation for them. There are message boards out there discussing this and it seems obvious to me that representatives of AA are posting there in defense of the company in order to cover this up. To them I would say that many good people in the miltary have a much harder time during the hardest initial years in the military because these expenses put them well under the poverty line. It's a damn shame and AA/pioneer should be ashamed of themselves.
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