A class action lawsuit filed in June alleges that Family First Life sold unqualified leads.
Class Plaintiffs in a California class-action lawsuit filed on June 3 are Greg Birch and David Doehring.
Family First Life and Shawn Meaike are named as defendants.
By filing a Second Amended Complaint on August 9, class plaintiff Michael Borish was added to the proceedings.
October 2018 saw the addition of Birch to Family First Life.
In May 2021, Doehring joined Family First Life.
In November 2020, Michael Boris joined Family First Life.
The Second Amended Complaint includes Andrew Taylor, a member of the Family First Life Board of Directors, as a defendant.
According to BehindMLM’s published analysis of Family First Life, the company’s business plan is centered on selling insurance leads to “Agent” distributors.
Family First Life’s fundamental business plan consists of sign-up, lead acquisition, and life insurance policy sales.
Mike claims that the leads are offered by third parties and that Family First Life is not engaged.
As noted earlier, the Class Action Complaint contends that these leads are worthless.
The following is taken from the Class Action Complaint (my emphasis):
FFS positions itself as a superior IMO (Insurance Marketing Organization) because it has access to and can give its Agents “exclusive,” “immediate,” “newly created,” and “never utilized” leads.
Occasionally, FFL would also describe these leads as “fresh.”
FFS describes and claims to its Agents that the leads are of high quality since they consist of consumers in need of insurance goods who have not been persuaded to acquire such products by anyone else.
Thus, Agents that purchase these leads feel they are the first to contact a client who has sought insurance products, such as those supplied by FFL.
FFL charges its Agents a premium for these “exclusive,” “instant,” and “newly produced” leads. FFL provides Agents discounts on certain leads to encourage their purchasing.
Based on FFL’s assertions, agents will spend hundreds, if not thousands of dollars acquiring leads, thinking them to be individuals in severe need of insurance who have not yet been reached.
According to evidence and speculation, FFL makes between three (3) and four (4) million dollars every week from the sale of these leads.
Nonetheless, FFL’s representations are untrue. In reality, the leads are not “newly created” nor “immediate,” nor are they “exclusive,” “never utilized,” or “fresh.”
Rather, the leads have been rehashed several times. For example, the same leads are resold to Agents within the same downline or crossline.
Most of the time, the contact information supplied by the leads for prospective customers is wrong since the phone numbers are disconnected or the email addresses are invalid.
And when the Agent had genuine contact information from these so-called “immediate” leads, the supposed prospective client frequently asked the Agent not to contact them again since they had previously been contacted by another FFL agent and were not interested in purchasing insurance.
Even worse, the leads are not leads at all, since the list consists of individuals who are not seeking insurance or who sought insurance years ago.
All three Class Plaintiffs assert that they purchased ineffective leads from Family First Life.
The plaintiffs then discovered that the leads were not as advertised.
Instead, the leads were recycled several times by other Agents within the organization, had inaccurate contact information, and included the names of individuals who were not interested in acquiring insurance products.
The lead quality was lower. Thus, the Plaintiffs were persuaded to pay a premium for leads that, in reality, did not qualify as represented.
Consequently, the Plaintiffs have suffered damages.
Plaintiffs seek to represent similarly harmed Family First distributors through four classes organized by state: a National class and three smaller California, Texas, and Florida classes.
If authorized, Class Plaintiffs who have filed a class action lawsuit will attempt to respond
Whether the leads sold by FFL were not of the quality claimed, and if so, whether Agents who purchased such leads should be refunded or compensated.
Eight charges claim eight alleged breaches of Californian and Florida law.
The exclusion of concerns associated with quitting Family First Life is a noteworthy contrast between the Second Amended Complaint and the initial Class Complaint.
Even though these charges are no longer included in the general allegations against Family First Life, as least as of the Second Amended Complaint, I will cover them since they make for interesting reading.
It is also a possible eye-opener for potential Family First Life Agent distributors conducting their due diligence.
In addition to its leads, another important selling factor of Family First is that Agent distributors are free to quit at any moment. Importantly, Agent Distributors may now take their company with them.
FFL, unlike other IMOs, does not compel its Agents to enter into direct contracts with its organization.
Instead, to make itself more appealing and competitive, FFS asserts that its Agents are independent contractors who should not be required to contract with any IMO, including FFL.
FFL signifies that its Agents are unrestricted in their ability to travel to and from another IMO at any time.
Family First Life’s website and promotional films are cited as examples of this portrayal in the initial class action complaint.
Mike mentions in one quoted Family First Life “enterprise development” video;
You are free to come and go at will and to work wherever you like.
This notion that we will attempt to lock them, hostage, not allow them to work elsewhere, or harass them is bizarre.
For a contract to be transferred from one IMO to another, insurance companies demand the execution of a release.
According to the initial Class Action Complaint, the issue is that this does not occur.
When an Agent desires to relocate to a different IMO, FFL restricts the Agent by refusing to sign the Release and instead requires the leaving Agent to sign a contract before obtaining the Release.
Worse, the Restricting Contract contains onerous non-compete and non-disclosure restrictions that prevent an Agent from transferring his/her book of business to another company.
Family First Life deems its client information, including generated business, to be “confidential information,” which the Restricting Contract prohibits Agents from utilizing “in any way.”
These regulations… remove an Agent from the marketplace since the Agent is prohibited from utilizing his or her clients’ contact information to purchase items while at a separate IMO.
Class Plaintiffs assert that Family First Life’s deceptive statements caused “considerable harm to leaving Agents.”
Either the Agent is compelled to sign the Restricting Contract so he/she can continue doing business with his/her preferred carriers without the ability to contact his/her book of business or downline Agents, or the carrier is compelled to remain with FFL so he/she can continue doing business with the preferred carriers without any restrictions.
If neither alternative is acceptable, the Agent has no choice except to wait six (6) months and refrain from doing business with the carrier before he or she may contract with the carrier using a difference IMO.
Given the burdensome nature of the Restricting Contract’s terms and the fact that Agents are misled into believing they can “come and go” from the FFL without limits, some Agents finally refuse to sign the Restricting Contract when it is imposed upon them.
Agents thus need to wait six (6) months before they may contract with their preferred carriers at a lower rate.
The practice of FFL is regarded as an unjustified trade restriction, which has harmed Agents and the entire insurance industry.
I am uncertain as to why these charges were eliminated from the Second Amended Complaint.
Family First Life has submitted two requests for an extension of time to reply to the Second Amended Complaint, according to the case docket.
Defendant has actively investigated the accusations in the Second Amended Complaint and has engaged in negotiations regarding the hiring of counsel for the individual Defendants.
As stated above, from the second request for an extension, Family First Life may have difficulty retaining legal counsel.
The court approved FFL’s second request for an extension on September 23, allowing them till October 11 to file their response.
It should be mentioned that earlier this year, another class action lawsuit was filed against Family First Life.
Class Representatives Reynaldo Suescum and Francisco Baserva allege FFL and Agent distributors of conducting fraudulent robocalls. In May, the matter was submitted to mediation.
Both Family First Life class actions are being monitored by Behind, so stay tuned for developments.