Sep 23, 2015

Allsup Gets Sued For Breach Of Fiduciary Duty

     A lawsuit has been filed in St. Clair County, Illinois against Allsup, a large non-attorney group that represents Social Security disability claimants, as well as Aetna Life Insurance Company. The lawsuit alleges "breach of fiduciary duty, fraudulent misrepresentation and concealment—failing to disclose conflicts of interest and material facts, and striving to reduce or eliminate the plaintiff’s bargaining power, as well as failing to refund" money owed the plaintiff.
     Allsup does most of its work for Social Security disability claimants at the behest of large insurance companies like Aetna. These companies write Long Term Disability (LTD) insurance policies which are mostly provided as part of an employee benefits program. LTD policies always contain an offset for Social Security disability benefits. This gives a big incentive for LTD insurers to demand that LTD recipients file Social Security disability claims and pursue them aggressively with representation, with providers such as Allsup.
     If a claimant who has been drawing LTD is approved for retroactive Social Security disability benefits, the claimant's LTD is reduced not just for the future but also retroactively. The LTD insurer wants to recoup some or all of the money it has already paid the claimant.
     The insurance company has a problem in collecting money out of the claimant's retroactive Social Security disability benefits. The Social Security Act forbids attachment of Social Security benefits for this reason. Allsup came up with a plan to get around this obstacle. They would use their representational relationship to cajole claimants into allowing their back benefits to be deposited into a bank account. In theory, it was a joint account but as a practical matter Allsup has complete control over the account. Allsup would quickly siphon off the money owed to the LTD insurer as soon as the deposit came in from Social Security. Allsup is so proud of this scheme that they patented the idea! Social Security has acquiesced in this dubious practice even though the Federal Deposit Insurance Company (FDIC) has found that a bank which participated in a similar scheme was engaging in an "unsafe and unsound bank practice." It's not hard to figure out why LTD insurers like Allsup far more than law firms. Law firms wouldn't engage in this sort of behavior. At least, I hope they wouldn't!
     Michael Garavalia of Flynn, Guymon & Garavalia in Belleville, IL is representing the plaintiff.

28 comments:

Anonymous said...

Don't they have to disclose the entire LTD file to SSA now?

Anonymous said...

Had a client this happened to. He was seriously ill and they took his back benefits. There wasn't any money left to bury him. Filed a complaint but no response

Anonymous said...

Allsup has had this coming for a long time

Anonymous said...

At the outset, let me say that I despise Alsup, not only for their lack of ethics, but their lousy representation of claimants. I also do not approve of how the LTD is taken from them out of their back check. However, these claimants have an LTD policy that specifically states they are responsible to reimburse the insurance company if they get SSA benefits. So, why are we to feel sorry for them when they are held to the contract they agreed to and signed?

Anonymous said...

1:10 PM With all due respect, this is not about feeling sorry for anyone but rather about fiduciary duty and conflict of interest.

Putting aside this case and speaking generally: When you represent someone, you are suppose to put THEIR INTEREST FIRST. If and when the client reimburses the LTD Insurance Company are two decisions the CLIENT is entitled to make in his/her best interest. A representative should not be in the business of serving as a collection agency for the client's creditor, especially where the representative has a business relationship with the creditor and is hoping to get future clients referred by that creditor. This is a conflict of interest.

Anonymous said...

I've seen plenty of Alsup fee agreements/representative agreements and I am very curious to see if what they put in those agreements is enough notice/disclosure to survive these claims.

Anonymous said...

I knew when I got LTD that I had to pay Met Life back, they treated me good on every thing. When it was all over I got to keep 10,000 dollars of the settlement, For Attorney fees and offset that they owed me. The settlement was 50000 dollars for 2 and a half years. If I didn't have LTD I would have gone bankrupt.

Anonymous said...

2:56

I am not advocating that the rep withhold the money. I actually agree with everything you said. When I have these situations, I tell the LTD carrier that I will advise the client they owe the money but that it is between them and me. Why get involved in that kind of liability anyway. Alsup is and always has been, scum

Anonymous said...

I meant them and my client - I stay out of it

Anonymous said...

The LTD carriers are often enough taking more than they are owed. I have had several cases where the LTD carrier tried to get all the back pay including aux benefits paid to children for months and months ahead of the point where they initially paid benefits. Many times you have a client who has been out of work for months at a time, using up all the sick pay, vacation, FMLA etc to try and keep that job before going on short term disability. LTD typically kicks in after that first 6 months of short term and means the job is now gone...but if there has only been intermittent UWA, you may have a back pay (if you file it right!) that goes back a year or more prior. LTD carriers will try and grab it ALL. They do not get to take $$ for months they did not pay. Watch them. And make sure that the client knows that the case expenses also come off the payback. If you need an expensive doc's opinion and the client paid....that comes off what your client pays back to LTD.

Anonymous said...

Whether or not this agreement will remain legal is yet to be determined, I guess. AS stated above, LTD companies have been know to try to take more than their fair share for reimbursement. We also know that if clmt doesn't immediately pay back the reimbursement amount then their LTD benefits get suspended. That's a shame, because it's leaving them in a worse position than before the SSDI award in many cases. If Allsup mismanages the transaction, then that's horrible and illegal on a number of levels - no question.

But assuming Allsup is legitimately overseeing this transaction fairly and objectively, then this seems like a service to the claimant on those two levels. I don't see any issue here as long as SSA has deemed this to be allowed and the claimant has the right to opt out of this assistance prior to the processing of a case.

Anonymous said...

I am sorry but in my opinion if the receiving party paid in any amount for this benefit. It should be illegal for the insurance co. To be reimbursed. I life ins policy does not get reimbursed nor a medical. Why should this be an exception.

Anonymous said...

Ihad great results from ALLSUP and I recommend them to all I know that are struggling get ss. I was approved in less than 5 monthes.

Anonymous said...

Anonymous said...
I am sorry but in my opinion if the receiving party paid in any amount for this benefit. It should be illegal for the insurance co. To be reimbursed. I life ins policy does not get reimbursed nor a medical. Why should this be an exception.
7:37 PM, October 13, 2015

I AGREE 100,000 % (Also prefer to remain Anonymous)

Anonymous said...

I paint 26.00 every 2 weeks for 8 years are they gonna give me that money back.?

Shannon Green said...

I just started the SSID process today with Allsup. I read tons of negative reviews about them. Your post was the only good comment about them. Any advice for me?

Anonymous said...

Allsup keeps losing my paperwork. Most importantly they keep asking for the paper with all my bank account info - they've apparently lost that twice. What does that say? Meanwhile, they tell me NOT to contact SSI, but I have to do all the work giving SSI all my info and SSI says they have not been in contact with Allsup. Back in April 2016, Allsup left me a voicemail saying that SSI approved my claim. When I contacted SSI they said this was not the case. May 2016, Allsup also claimed that I had not submitted my SSI forms, which I spent hours filling out online; SSI also confirmed I had submitted my forms in February 2016. Can I fire them now?

Anonymous said...

Thank you Anonymous 1:21, September 02, 2016 I am so sorry to hear about your situation! I was just going to try to sign up with them. I wish I could help you..but your commenting on this forum helped me from getting involved with a company I can't trust! Thanks again & I wish all the best!

Christine Kennedy said...

Our long-term disability (Matrix) is trying to have us use Allsup without really explaining why other than to say we'll receive more money. Reading the comments on here, it doesn't look like that's the case and looks like we should avoid them. Is there any benefit at all to using Allsup?

Anonymous said...

This lawsuit has got to do with LTD insurance company relationship with Allsup. Not regular SSDI CLAIMS. That is how I am reading this. I have had no problem with Allsup helping me with getting SSDI. I WAS NOT RECEIVING LTD.

Anonymous said...

Sadly, the woman in this case who had Aetna recommend Allsup to her who then proceeded to work very hard keep all of her 8,800+ in SSDI payments, decided to settle out of court with Allsup. She was suing for 50,000 in damages plus attorney's fees and her complaint was worded well, and appeared valid, with collusion being only one of the mentioned complaints mentioned.

order Order ~Util - Terminate Motions Thu 8:25 PM
ORDER re24 Stipulation of Dismissal filed jointly by the parties: Under Federal Rule of Civil Procedure 41(a)(1)(A)(ii), a Stipulation of Dismissal filed by all the parties who have appeared in the action is effective immediately upon filing and does not require judicial approval. See e.g., Jenkins v. Village of Maywood, 506 F.3d 622, 624 (7th Cir. 2007). All claims are dismissed without prejudice pursuant to the stipulation. In light of the stipulation, the22 Motion to Dismiss is DENIED as MOOT. The Clerk of the Court is DIRECTED to close this case on the Court's docket. Signed by Judge Nancy J. Rosenstengel on 03/31/2016. (bak)

Anonymous said...

Who can be trusted anymore? Hi to the doctor for one thing you come out with more. The doctors are truly, "in practice", and cause the majority of these LTD. Everyone is greedy for the Benjamin's.

Anonymous said...

Who can be trusted anymore? You go to the doctor for one thing you come out with more. The doctors are truly, "in practice", and cause the majority of these LTD'S. Everyone is greedy for the Benjamin's. The person's are still disable with bills to be paid. The Lawyers, Doctor's are getting paid at my DISABILITY. I'M BROKE AND THEY'RE GETTING RICHER!

Anonymous said...

Prudential pays my LTD benefits. They retained Allsup to work with the SSA on my behalf to obtain SSDI benefits. So far, they have communicated with me above my expectations. Read your LTD policy! I read it before I went on LTD and was well aware that Prudential would be entitled to my SSDI benefit back to the time I started receiving LTD payments.

It amazes me that some people think they are entitled to both. If and when you are awarded SSDI benefits, future payments from Prudential will be the difference between the LTD benefit and the SSDI benefit.

I had no issue with setting up a special account and giving them access to it. If I am awarded SSDI benefits, Prudential will pay Allsup from the recovered funds.

Sounds pretty simple to me.

Anonymous said...

The shame of all this is sure, it's easy to say "read your LTD policy" when you're not dying. I was on heavy chemo at the time but knew something didn't seem right with me being eligible for SS benefits. So I pushed back a bit knowing I didn't qualify but Allsup hounded me for 3 months to allow them to apply on my behalf saying I deserved this money having cancer. They then twisted my facts from my phone interview to get me awarded the lump sum. If they would have told the truth of me already getting 70% of my pay when they applied on my behalf the SS agent I spoke with said I would have been denied.This proves their predatory intent on profit by fraud.

Anonymous said...

Back in 2005,I had to go out on disability thur my work,ended up having go file an get a lawyer for permanent disability, long story short after being denied an time went on, got a phone call from allsup saying thur my work they could help me get it faster ect.said I had a lawyer an couldn't use them.I had already paid my lawyer, they said I would only lose what I had paid them.They did end up getting me on disability over 6 months later or so..but I never saw one penny of back pay, I wanted to know how much was my back pay, they never would tell me, just said they had to use it all to pay themselves an my work...I paid in for disability benifits at my job for almost17 yrs..At least send me something in the mail that showed how much back they got an what else they used it for...nothing...was do sick at time, years later I even called them asking for a print out of what amount I should have gotten.something doesn't make sense...To this day I still believe I should have gotten something back,at lease sent me a print out of my amount an what they took..what they took was evert penny..?? Never knew how or who to turn to just to get some answers..??

Ashley wholaver said...

Go with a lawyer, do not use allsup! They do not have their stuff together and will get you denied because of it. Im in that sitation now. do not use them im begging you

Robert said...

I became disabled in 2002. Met Life was myLTD carrier who recommended that I file for Social Security near the end of my LTD term. I personally did all required in the filing process but was still recommended by Met to use Allsup to help me monitor and speed the process. Allsup vowed to me that there was a fee which at maximum was $4500. When request was made by Allsup for my Bank Account number I was immediately hesitant but was assured that they had no authority to access my account without further authorization. I wondered why they were so at I ate about representing me after my application and interview process was over 30 days past. For that reason Social Security mainlycommucated with me. In fact they often called me for updates. At the end of the process, I found out why. Allsup were Liars and was only seeking a way to get into my account, though they had vowed that the information I had given them was not sufficient to get into my account. My Social Security/ Disability was approved and no sooner than the money was placed in my account, Allsup withdrew basically all the money and claimed that it was Owed to my LTD carrier Met. I had strong words with them for unauthorized debit of my account, and lying initially when I questioned them about this. Because of the underhanded, outside of the way this has happened to me me, Allsup should be forced to reimburse in Full or in Part Myself and all others who has been victim to this Scheme.