Ameriprise Settles Deceptive Sales Practices Charges

 

InvestmentNews reported on October 25 that Ameriprise Financial Services reached a settlement with Massachusetts over accusations of deceptive sales practices. The $200,000 settlement centers on the Ameriprise’s failure to supervise their financial representatives, allowing them to charge fees for financial plans that were never delivered to clients. In addition, the reps failed to disclose the fees behind the plans to clients.

At the heart of the case were six reps, some of whom had histories of disciplinary action or customer complaints. Nevertheless, Massachusetts did not pursue action against the reps individually, but rather the firm as a whole. Along with the settlement, the state called on Ameriprise to make restitution to the customers affected by the theft. In addition, Attorney General Martha Coakley demanded that Ameriprise develop new standards and regulations to protect customers from future deceptive practices, including prohibiting financial advisers from signing clients’ names on applications.

Five of the six reps involved in the case have been fired or resigned from Ameriprise while one remains on suspension. Ameriprise’s spokesman Chris Reese says, “”We have returned money to clients where appropriate and we have taken steps to ensure issues like this do not arise again.”

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