by Brian Mahany
Until recently, most of our fraud recovery practice involved investment fraud cases – stockbrokers, bankers and Ponzi scheme operators who fleeced their customers and clients. Now it seems, that big insurance companies and mortgage companies are fleecing their own agents. From Allied Home Mortgage to Allstate, brokers and agents are claiming they are victims of deceptive business practices.
On April 12th, former agent Paul Mattus sued Allstate Insurance Company in a Pennsylvania federal court seeking $15 million in damages. Mattus accuses Allstate of a hostile takeover of his business.
While its not unusual for agents and brokers to have disagreements with their employer, Mattus says that the insurance giant has engaged in the “systematic termination” of independent contractors who were previous Allstate employees. He says that Allstate first got rid of many of its agents and forced them to become independent contractors. Of course, Allstate required those former employees to sign “non-negotiable exclusive agency agreements.”
Later, he claims that Allstate then elected to get rid of older agents and replace them with cheaper, younger agents. Because the agents had signed exclusive agency agreements, they were left with no other book of business. The agreement also says they cannot sell insurance for one year after parting.
Was Mattus simply an agent with too many years in the business that should have long ago retired? According to an article in InvestmentNews, Mattus was a top 10 producer for the company.
No answer has yet been filed by Allstate. Other agents, however, have been suing the insurer.
If you are a former agent of Allstate or any other insurance company, securities firm or mortgage broker and feel that you have been wrongfully squeezed out or not properly paid, call us.
The fraud lawyers at Mahany & Ertl have helped people across the United States. We concentrate in fraud recovery and asset recovery cases; our goal is to get back your hard earned money.
Mahany & Ertl, LLC – Fraud Recovery, Tax Resolution & White Collar Criminal Law. Milwaukee, Wisconsin; Detroit, Michigan & Portland, Maine. Services nationwide.