Prepaid or “Preneed” Funeral Plans are a bad idea. This is evidenced by the recent Illinois Funeral Director Association(IFDA) Preneed Scandal and the National Prearranged Services (NPS)Prepaid funeral Plan Scandal. Hundreds of Millions of Dollars disappeared from folks funeral contracts in These Scandals.
National Prearranged Services is no longer in Business.The Illinois Funeral Directors Association is still in the prepaid Funeral Business. I strongly urge you not to do business with these IFDA folks or any of their member funeral homes. The possibility of RIP OFF Remains.
Snippet From The Chicago Tribune:
“While prepaid plans sound enticing, they often come with strings attached. Funeral homes usually pitch the plans as a way to lock in funerals at today’s prices, saving you the cost of inflation. Cashing in the plans, however, can sometimes prove difficult.
If you are considering such a plan, review the contract carefully and understand exactly what you are buying. Ask where your money will be held and who will manage it. Some accounts that hold money from prepaid plans have gone under in recent years, leaving the folks who invested empty-handed. Make sure the contract has a provision that protects you if the firm goes out of business. Also check to see if there are fees to cancel the plan, or what happens if you move.
Here is another case of the Funeral Director taking your Preneed, Prepaid Funeral Funds. This is the classic Preneed Funeral Scam that has been pulled off by NPS, the Illinois Funeral Directors Association(IFDA), Randal L Earl Treasurer of the NFDA(National Funeral Directors Association) For the Museum of Funeral Customs and as is often the case in this story, the individual funeral employee.
A well-known Sanford man was arrested Thursday, accused of stealing more than $100,000 that was supposed to go toward funerals.
Florida Department of Law Enforcement agents say Bernard Mitchell worked for a Sanford funeral home for more than 40 years, and for the past three, they say he’s been stealing money from customers. They say that instead of putting the pre-paid money for burial plots and funerals into a state escrow account, which is state law, Mitchell pocketed lots of the money.
The great Illinois Funeral Directors Association Preneed Scandal is an issue in the Race for governor of the State of Illinois. The Preneed Trust Scandal has forced Financial hardship on many Funeral Directors in the State. Many will have to work into retirement. Some funeral homes have closed. 100 million dollars is gone! Bankruptcy is being considered by some Funeral Directors.
THe Illinois Funeral directors Association Ponzi scheme my disqualify Comptroller Dan Hynes from becoming Governor.
The situation is still unresolved, tied up in the Courts. The Association is in need of a trustee because Merrill Lynch has pulled out. The political question is-Has the way Comptroller Dan Hynes handled the (IFDA)matter disqualified him to be Governor of the State of Illinois?
Summary:
In 1980, the Comptroller’s office licensed Illinois Funeral Directors Association to administer a “pre-need” funeral trust fund. Using these funds, consumers can plan and pay for funerals in advance. In this case, the funeral costs were paid to local funeral directors, who then invested the consumers’ deposits in the IFDA trust fund. Over time, about 50,000 consumers paid $300 million into the fund.
Normally, these pre-need funeral trust funds – which by law are supervised by the Comptroller’s office – are conservatively invested. That way, the funds generate a modest but reliable profit, so funeral home directors do not lose money when they provide a funeral in 2010 that was bought at 1995 prices.
100 million dollars is gone from the trust fund
However, in the mid-1980s, IFDA Services embarked on a risky investment scheme, using the bulk of consumers’ money to buy expensive “variable universal life” (VUL) insurance policies on funeral home directors.
VUL policies do not provide a specified death benefit; instead, the actual payout depends on the ups and downs of the stock market. They carry hefty management fees, and they can trigger huge tax penalties on payout. These policies also have low cash values, so fund managers can’t readily bail out and find better investments if the stock market tanks.
The entire scheme depended on receiving frequent cash injections from these insurance policies. That meant the insured funeral home directors had to die on schedule – which, not surprisingly, they failed to do.
These VUL insurance policies do have one huge advantage – for the agents who sell them. The premiums on these policies are very high. A lawsuit against the IFDA states that the fund paid $90 million in premiums on insurance policies with total death benefits estimated at $357 million. Since the scheme’s final collapse in 2009, the majority of those policies are being cashed in – for about $100 million.
The IFDA trust fund apparently used money from new investors to pay a modest but steady stream of “profits” to previous investors. That is the “Ponzi scheme” system made infamous, most recently, by Bernard Madoff.
The Illinois Funeral Directors Scheme was like that of Bernie Madoff
As a result, an estimated $100 million in consumer dollars vanished from the fund, and hundreds of family-owned funeral homes throughout Illinois are facing serious financial losses – even bankruptcy.
Dan Hynes the Comptroller Now candidate for Illinois Governor
“We all know that Dan Hynes waited far too long to act on disturbing reports about conditions at the Burr Oak Cemetery,” Austin said. “The IFDA scandal shows that Comptroller Hynes has a decade-long history of ignoring serious problems – with disastrous consequences for 50,000 Illinois consumers.”
Austin noted that Hynes has refused to provide documents requested by Bruce Rushton, a reporter for the Springfield State Journal-Register, that might shed light on the Comptroller’s delay in acting to end the fraud and protect consumers.
“When well-respected journalists file legitimate requests for information from his own office, Comptroller Hynes loses his enthusiasm for transparency, accountability, and the public’s right to know,” Austin said.-summaryvia davidormsby.wordpress.com
Funeral Industry|Funeral News | Funeral Blog by Your Funeral Guy
Roland Burris and Illinois Funeral Directors Association need to give Answers Now in Ponzi Scheme.
The President of the Illinois Funeral Directors Association has resigned. Chris Woodridge resigned the Illinois Funeral Directors Association for Personal Reasons. Merrill Lynch a while back bowed out as trustee. So Now What? The IFDA Preneed trust lost 40 million of the folks preneed money in Illinois before The Market crashed in September 2008. Today the amount has grown to over 100 million.
This has impacted the funeral industry-and Funerals in Illinois and raised the average cost of the Funeral in Illinois.
The Illinois Funeral Directors Association has been hit by key defections in its leadership and administration. First, Merrill Lynch Bank & Trust Co. sent a letter informing the association of its intention to step aside as interim trustee for the association’s beleaguered preneed trust fund. Then, Chris Wooldridge resigned as association president.
Despite the timing between the two resignations, Duane Marsh, Illinois IFDA executive director, said there is no connection between the trust situation and Wooldridge’s resignation. “Chris made a personal decision and it is our job to go on and that is what we will do. We’re going to honor it,” Marsh said.
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