Ameriprise (AMEX) Class Action Settlement

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ditsteve
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Ameriprise (AMEX) Class Action Settlement

Post by ditsteve »

Four years ago I was faced with a 50% salary increase which I didn't know what to do with at the time. I sought financial advise from a well known company, American Express. Not knowing anything about investing, fees, expenses or tax efficiency I was easily sold on a variable annuity whose underlying funds were chosen for me by my "advisor". Three or four of the funds choses were AMEX's own funds and all had very high ER (on top of the high fee for the annuity).

Some time after that, while working overseas, I stumbled across the Morningstar website and the Diehard's forum. I have learned a lot on that forum and subsequently this one. I have surrendered all my AMEX products and am an index investor. I am on my way to a four fund portfolio (or as close as I can get). When I learned about fees and expenses I couldn't wait to get out of AMEX. I felt cheated and I was enraged by the "advise" I was given. Never was I shown the importance of fees or expenses, never was I shown how expensive those products could have been.

Last week I recieved a notice of a class action suit againts Amex (now Ameriprise). The notice was mandated by the court and not by the plaintiff's lawyers. The argument by the plaintiffs pretty much mirror my arguments above. AMEX is accused of steering their clients into their own funds from which they get a percentage of the fees, or into selected funds which share with them a portion of the fees. They claim that the financial advice given was not suited for the individual at all and was part of a broader drive to sell certain funds. A settlement has been proposed, but the court as yet has not approved it. The payout would be very minimal for an individual investor who had relatively few holdings such as me.

I am choosing to take part in the class. Not so much to get a settlement payment, which is not guaranteed, but rather to "strike a blow" against these practices. By taking part I would lose my rights in any other suit or settlement. I had pretty much written off the losses I had made as just being part of my investing education, but when this notice came along I couldn't pass up the opertunity to take part.

Has anybody else recieved this notice or does anybody have any comments? Am I just taking part in America's "sue happy culture"?

Regards,
Steve

BTW, I do believe in tort reform.
"Stay on target."
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Mel Lindauer
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Ameriprise Lawsuit

Post by Mel Lindauer »

Hi Steve:

I think you're just adding your voice to the chorus of those who are saying "We're mad as hell, and we won't take it any more!"

Good luck in recovering whatever you eventually get. Even if you don't get a lot, you can bet your bottom dollar that the lawyers will get a bundle, and all of that will come out of Ameriprise's pockets, so at least it will sting a bit. And the bad publicity will hopefully alert other investors to steer clear of them, too.

Regards,

Mel
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dphmd
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I got one, too

Post by dphmd »

I received one of those notices as well. I read it through to see how much I would get out of the proposed settlement: $30. It's only a small fraction of the amount I paid in load charges and high ER's, but better than nothing, I guess.

David
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ditsteve
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Post by ditsteve »

Hi Mel,
Even if you don't get a lot, you can bet your bottom dollar that the lawyers will get a bundle
This is my only problem with the settlement. I don't believe the lawyers deserve it any more than Ameriprise. The money should go to the investors. As it stands the lawyers are set to get 27% of the settlement, or $27million! :shock:
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zhiwiller
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Post by zhiwiller »

ditsteve wrote:This is my only problem with the settlement. I don't believe the lawyers deserve it any more than Ameriprise. The money should go to the investors. As it stands the lawyers are set to get 27% of the settlement, or $27million! :shock:
You are doing nothing but signing your name on a sheet of paper and mailing it in.

The lawyers are painfully extracting the ill-gotten gains from the company and you can bet it will be a hard fight.

I'd say they deserve a quarter of the loot. 100% of $0 is less than 73% of $100mm
joppy
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class action privacy

Post by joppy »

Do these folks want to know your Social Security number in order to pay you your "minimal payout"? Is it worth it to you to give your social security number out for this purpose?

I have received notices in the past from attorneys asking for my name, address and social security number in order to claim my portion of the class action settlement. I usually read them over and toss them out, because I don't trust them enough to give out my social security number for the tiny amount of money they would pay me. I wish there were a way to say - here is my name and address, you can't have my social security number - please pay out my payout to charity.

- Joppy
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Raybo
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Post by Raybo »

I was with American Express (it was IDS when I started) for years due to a complicated retirement plan that involved a KEOGH, SEP-IRA and employees. The guy did alright by me. I did buy some AmEx funds but since the SEP-IRA was self-directed, I managed to get a fair amount of my money over at Vanguard.

I, too, got the award settlement. I get these all the time. The nice thing about this one is that you don't have to send them the underlying records, which would make it even harder to claim an award. I filled out my name and address on line. They didn't need anymore information than that.

About the same time, I got a settlement offer on a VISA suit for foreign charges on my credit card. For this one, I had to go back to 1996, find all my credit card statements (which I have duly saved for just this purpose!), find all the foreign charges, add them up, and then enter the account numbers of the credit cards, the year of the charge, and the amount. What a crock. How many people ripped off my VISA will have such data or take the time (about 1 hour) to even fill out the form.

While I was the one ripped off, I won't get much. This means that the real incentive not to rip off consumers is the huge fees paid to lawyers. While I would prefer to get more of what was taken from me, at least someone is holding these rip-off artists to account.

Ray
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ditsteve
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Post by ditsteve »

No SSN needed. They sent me a prefilled form (name and address) with my AMEX account number. All I had to do was sign, date and mail.

Regards,
Steve
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haban01
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Hello Guys

Post by haban01 »

AXP- Yes, I received the notice about a month ago! The interesting part is the lawyers get up to 37%!! What about the poor people that had 1 million + invested with AXP.

In this case the lawyers would get 37mm.
Eric | | "Stay the Course" | "Press on Regardless"
mptfan
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Post by mptfan »

For those who criticize the payment to the lawyers, do you really believe that Ameriprise would have done anything to change their practices or pay back a nickel without being compelled? Do you think they simply gave up without a fight? Don't you realize that the lawyers have to spend a great deal of time and money to vigorously fight corporations like Ameriprise before they are willing to back down? The lawyers also take a significant risk in cases like this because if they lose, they get nothing. If the lawyers are not able to collect a profitable fee in settlements like these, then they will refuse to fight the next case that comes along, and everyone would suffer because the Ameriprises of the world would then have free reign to do whatever they wished and continue to screw the little guy.

To the original poster, you say that you are happy that Ameriprise is getting what they deserve, and then you say you are in favor of tort reform?? Do you realize that tort reform would bar the very lawsuit that you are in favor of???
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Rick
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Post by Rick »

Good luck. The more I learn about these companies-the more I feel its close to "legalized stealing". I know about buyer beware...but these companys are really unethical. Lets hope the courts change the legal duty of all these so called "financial advisors".

Rick
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ditsteve
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Post by ditsteve »

mptfan wrote:To the original poster, you say that you are happy that Ameriprise is getting what they deserve, and then you say you are in favor of tort reform?? Do you realize that tort reform would bar the very lawsuit that you are in favor of???
I think the key word that you forgot or overlooked in my post was reform. Reform does not mean eliminate. Also, I never said I was "happy that Ameriprise is getting what they deserve". Please don't mischaracterize my post.

Regards,
Steve
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amerijunk
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Post by amerijunk »

Could be worse. We could be getting a coupon for 50% off a financial plan from Ameriprise. I would surely chunk that in the trash can.

It's really a shame that hard working people go to Ameriprise looking for financial advice when in fact the plan is nothing more than a sales pitch to buy annuities and insurance. This company targets the uninformed and the financially uneducated. From looking at AMPs SEC filings, it's the same old, same old as the bulk of new money goes into annuities and life insurance. I still own the over-priced annuity but this'll be the year I bite the bullet and eat the surrender charge just so I don't have to look at their statements ever again. The market is at a all-time high and my annuity is still down 20+%. Just goes to show you what those .5% here and there do to the value of your investments. It looks like we're not alone though as their's a web site dedicated to Ameriprise misdeeds http://www.ameriprisesuck.com.
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johnoutk
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Post by johnoutk »

Yeah, I lost a chunk o' change through them with 2 VULs, front loaded funds, and advisory fees etc. etc. Still have a couple CDs left with them. I can't wait to get the settlement fee so that I can invest it in Total Stock Market Index. They are thieves....
grberry
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Post by grberry »

Well, my wife and I got our settlement checks this month. $40, woo hoo! Now, is this taxable income?
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Zook13
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Re: Ameriprise (AMEX) Class Action Settlement

Post by Zook13 »

ditsteve wrote:AMEX is accused of steering their clients into their own funds from which they get a percentage of the fees, or into selected funds which share with them a portion of the fees. They claim that the financial advice given was not suited for the individual at all and was part of a broader drive to sell certain funds.
Not all wanting to be a buzzkill here because I agree with the absurdity of Ameriprise and their lack of standards, but playing Devil's advocate here....

What laws/rules exactly have been broken here? Just curious as it seems like a pretty soft area here.
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