Family First Life is accused of selling bad leads in a class action lawsuit that was filed in June.
Greg Birch and David Doehring are the named plaintiffs in a class action lawsuit filed in California on June 3.
Family First Life and President Shawn Meaike have been named as defendants.
On August 9th, class plaintiff Michael Borish was added to the case in a Second Amended Complaint.
In October 2018, Birch joined Family First Life.
May 2021 saw Doehring join Family First Life.
In November 2020, Michael Boris joined Family First Life.
Andrew Taylor, a director of Family First Life, is added as a defendant in the second amended complaint.
The business concept of Family First Life centers around selling insurance leads to “Agent” distributors, as explained in BehindMLM’s published assessment of the company.
The three main steps of Family First Life’s business plan are enrollment, lead acquisition, and life insurance policy sale.
Mike asserts that Family First Life doesn’t get involved and that the leads are reportedly offered by third parties.
The Class Complaint asserts that these leads are dead ends, as was previously acknowledged.
The Class Complaint contains the following passages, which I have highlighted;
Because it has access to and can give its Agents “exclusive,” “immediate” leads that are “newly created” and “never utilized,” FFS positions itself as being a better IMO (Insurance Marketing Organization) than competitors.
FFL would occasionally describe these leads as being “fresh.”
Because they consist of customers who require insurance goods but haven’t yet been approached by anyone else to buy them, FFS describes and guarantees to its Agents that the leads are of high quality.
Agents who buy these leads are thereby persuaded to feel that they are the first to contact a customer who has inquired about insurance products similar to those offered by FFL.
FFL charges its Agents a premium for these “exclusive,” “instant,” and “newly produced” leads. To encourage Agents to buy these leads, FFL even gives incentives to them.
According to FFL’s claims, agents would spend hundreds, if not thousands of dollars buying leads because they think the potential customers are desperate for insurance and haven’t been approached.
According to knowledge and belief, FFL makes between three and four million dollars a week from the sale of these leads.
The claims made by FFL are untrue, nevertheless. The leads aren’t actually “newly produced,” “immediate,” “exclusive,” “never utilized,” or even “fresh” in the traditional sense of the terms.
Instead, the leads have through many recycling processes. The same leads, for instance, can be resold to Agents in the same crossline or downline.
Most frequently, the leads’ contact information for potential customers is inaccurate since the phone numbers or email addresses are no longer active.
The putative prospective client would frequently request that the Agent not call them again since they had previously been contacted by another FFL agent and were not seeking to buy insurance, even though the Agent had genuine contact information from these supposedly “immediate” leads.
Worse, the list contains people who are either not searching for insurance or were looking for insurance years ago, so the leads aren’t even leading at all.
The three class members allege that Family First Life sold them bad leads.
Plaintiffs later discovered the leads weren’t what they had been told.
Instead, the leads were reused repeatedly by different agents inside the organization, including inaccurate contact information, and included the names of persons who had no interest in buying insurance.
The quality of the leads was poor. As a result, even if the Plaintiffs did not qualify for the leads, they were persuaded to pay a premium for them.
Plaintiffs have suffered harm as a result.
Through four classes organized by state—a national class and three smaller cases for California, Texas, and Florida—class plaintiffs seek to represent similarly harmed Family First distributors.
If accepted, class plaintiffs’ proposed class action would try to address
Whether the leads sold by FFL were not of the quality that was claimed, and if so, whether the agents who bought those leads should get recession or restitution.
There are eight counts totaling eight alleged breaches of Californian and Florida law.
The Second Amended Complaint and the Original Class Complaint are very interesting in that the Second Amended Complaint leaves out issues with leaving Family First Life.
I’m going to cover the charges even though they aren’t any longer a part of the overall accusations made against Family First Life, at least as of the Second Amended Complaint.
It may serve as a wake-up call during the due diligence process for potential Family First Life Agent distributors.
One of Family First’s other key selling advantages, besides its leads, is that Agent distributors are free to leave at any moment. Importantly, this enables Agent Distributors to carry on with their business.
FFL does not need its Agents to enter into a direct contract with its business, in contrast to other IMOs.
Instead, FFS asserts that its Agents are independent contractors and that, as a result of their status, they shouldn’t be required to enter into a contract with any IMO, including FFL, in order to increase its attractiveness and competitiveness.
FFL asserts that its Agents are unrestrictedly free to enter and exit another IMO whenever they so want.
Numerous instances of this depiction are cited in the initial class complaint from Family First Life’s website and promotional films.
Make quotes the following from a Family First Life “enterprise development” video:
You are free to come and go as you like and to work anywhere you choose.
It seems strange that we would want to entrap someone, force them to work someplace else, or otherwise coerce them.
Insurance companies need a release to be signed for a contract to be transferred from one IMO to another.
The issue is that this doesn’t take place, according to the initial class action lawsuit.
When an Agent chooses to transfer to another IMO, FFL restricts the Agent by declining to sign the Release and instead requires the leaving Agent to sign a contract before any Release can be acquired.
The Restricting Contract also contains onerous non-compete and non-disclosure restrictions that make it impossible for an Agent to transfer his or her book of business to another agent.
Excerpts from the Restricting Contract demonstrate that Family First Life views its customers’ information, especially business generated, as “confidential information” that Agents are not permitted to use “in any manner.”
Because the Agent is prohibited from utilizing the contact information of his/her clients to make purchases while at another IMO, these requirements… remove an Agent from the market.
Family First Life’s deceptive statements, according to the class of plaintiffs, “severe injury to leaving Agents.”
Either the Agent is compelled to sign the Restricting Contract so that he or she can continue working with their preferred carriers, but without being able to communicate with their book of business or downline Agents, or the carrier is compelled to remain with FFL so that they can work with their preferred carriers without any restrictions at all.
If neither alternative is acceptable, the Agent will be forced to wait six (6) months and refrain from doing business with the carrier before entering into a new contract with that carrier via a difference IMO.
Some Agents finally decide not to sign the Restricting Contract when the agreement is forced upon them because of the onerous language of the terms included in it and the fact that they are deceived into thinking they may “come and go” from FFL without limits.
Agents must wait six (6) months before they can sign a new contract with their preferred carriers as a result.
Agents and the whole insurance industry have been harmed by FFL’s behavior, which is seen as an unjustified limitation of commerce.
Why these accusations were removed from the Second Amended Complaint is unclear to me.
A review of the court docket reveals that Family First Life has submitted two requests for a delay in the deadline for responding to the second amended complaint.
The defendant has thoroughly looked into the claims made in the second amended complaint and has started having conversations about hiring lawyers for each defendant.
Family First Life may be having problems finding legal representation, as stated above and taken from the second request for an extension.
FFL was given until October 11th to provide an answer after the court granted its second request for an extension on September 23rd.
It should be noted that Family First Life was the subject of another class-action lawsuit earlier this year.
Reynaldo Suescum and Francisco Baserva, class representatives, accuse FFL and Agent distributors of engaging in telemarketing fraud. In May, the dispute was sent to mediation.
Tracking for both Family First Life class actions is behind, so check back for updates.