Suits Claim Prudential Managers Destroyed Targeted Documents
May 03, 2011
Managers in at least several local sales offices of Prudential Insurance Co. of America allegedly destroyed marketing documents over the past 18 months even as those documents were the subject of wide-ranging probes into the company's sales practices, according to former agents in sworn statements newly filed in lawsuits against the insurer in U.S. District Court in Newark, N.J. The allegations come fast on the heels of Prudential's firing of a senior official for allegedly destroying such documents, an action that the insurer said was in clear violation of internal orders to protect relevant material. Prudential was still studying the new allegations and had no comment late Tuesday afternoon. It has generally disputed that it in any way condoned document destruction. The agents' accounts are being used by attorneys suing Prudential on behalf of consumers and former employees who claim to be whistle-blowers. The statements are attached as affidavits to a motion seeking to probe whether the insurer engaged in a widespread, deliberate strategy to systematically eliminate damning material. J. Bryan Wilton, an attorney in Louisville, Ky., said the accounts were gathered ``through informal investigations'' conducted by the attorneys. One of the accounts comes from Williemae Ridley, 43 years old, a 13-year Prudential veteran before his dismissal in April for allegedly using some of the deceptive sales practices that have been the focus of regulatory scrutiny nationwide since the spring of 2010. In his sworn statement, Mr. Ridley, who worked in Prudential's Kansas City office, describes ``a continuous and wholesale destruction by my management of the sales and marketing information and computer software which existed in our office.'' In an interview, he said the marketing materials were either thrown in trash cans in the office, or boxed and left for janitors to cart to dumpsters. He also contends that, on the day he was fired, some local managers ordered a clerical worker to delete all the files from his computer. The computer contained form letters, policy-pricing information and data on his clients, including their payment status. Destruction `Systemic' In his sworn statement, Mr. Ridley maintains that he received ``direct orders to delete software'' that included form letters and policyholder information ``on at least a dozen separate occasions between January 2010 and April 2011, due to `compliance problems' with the software, i.e., the software did not comply with state and federal regulations.'' A Prudential agent stationed in New Jersey shared Mr. Ridley's experience, the filing states, ``illustrating that the destruction of software was systemic throughout Prudential.'' The filing also quotes a former agent in a suburban New York Prudential office who maintains his manager told him in either late 2009 or early 2010 that the office had to destroy ''all existing marketing material'' because ''state regulators were making `spot checks' '' of the insurer's branches ''and that nearly all the materials (in the branch) did not comply with state and national legal requirements.'' Prudential has previously acknowledged ordering large volumes of marketing material yanked from office shelves nationwide pending reviews of the material by its legal staff, saying it wanted any questionable material kept out of policyholder hands. Managers were expected to preserve copies of any literature taken out of circulation, but were free to destroy extra copies, Prudential officials and regulators say. In the interview, Mr. Ridley said he didn't know if his managers kept copies of the trashed material. The Prudential-related material deleted from his computer had been downloaded from company computers and was generally available to all agents. A company spokesman said late Tuesday that the computer may have been wiped clean in an effort to protect proprietary information. Mr. Ridley also contends that the local managers dumped the contents of 12 filing-drawer cabinets he maintained on his sales into about a half-dozen boxes, and he believes these were taken by the managers to a Prudential service center. `Scapegoats' Prudential has been under fire for allegedly misleading customers nationwide about the cost of taking out additional insurance policies that were financed with proceeds from older ones, or were sold on the basis that the policies would pay for themselves over time through high levels of dividends. In the filings, Mr. Ridley said he believes he and other agents were fired ``as scapegoats'' in the face of the regulatory probes. He maintains that any sales pitches he used were learned from company managers. He complained that the insurer now is taking customers' words over his in rescinding numerous policies he sold and is trying to reclaim commissions he was paid. ``If it's a matter of what was said, Millican would give the customer the benefit of the doubt every time,'' he said in the interview. The newest accusations come at a critical time for Prudential. It is has been in talks to settle a consumers' suit seeking class-action status in federal court. Moreover, while it has agreed to record fines and a major remediation program with 42 states and the District of Columbia as a result of a multistate task force that revealed its harsh findings in July, eight states, including California, Florida and Texas, are still weighing how to resolve their concerns about Prudential's obligations to wronged consumers. Representatives of those eight states met Tuesday to try to determine if there may be a way for them to collectively work out their remaining concerns.
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