Dateline NBC Expose not Very Exposing
April 18, 2008 by RickBryan
Last Sunday Chris Hansen and the Dateline NBC crew aired an ‘expose’ on sales tactics used to sell Equity Indexed Annuities (EIA). Since annuity sales are a tremendous income generator for the insurance industry, as well as being an important part of a retirees’ financial plan, there was quite a bit of nervous anticipation throughout the industry. The National Association of Insurance and Financial Advisors (NAIFA) issued a press release giving its members a ‘heads up’ before the airing, and then followed up with a response. Unfortunately NAIFA’s response was pretty lame, which pretty much mirrored the impact of the Dateline NBC segment.
The primary item of interest to Chris Hansen and the producers was that the sales agents didn’t fully explain the surrender charges built into the EIA. And there’s no question that’s a significant feature of the product which definitely needs to be explained to anyone investing in the annuity; no question about it, and the agents’ failure to do so was definitely misleading. But as I’m watching the show all I could think to myself was “Is that it? Is that the best “exposing” you can do?” Another part of the episode showed a seminar to seniors where the presenter told the audience the FDIC had an “F- rating.” That’s as much an example of stupidity as it is of misleading sales tactics, but again, not quite the smoking gun I expected. Another fellow who was training a group of producers to sell the product said a few times that an objective of the sales process should be to scare the seniors. I thought this was a pretty damning portion of the program, however the big letdown in my mind was that the film crew never taped an agent using those tactics to sell the product. And that’s the focus of my criticism of the segment: they almost certainly could have caught dozens and dozens of agents “in the act,” but they didn’t. Dateline should have spent more time developing questions for their senior to ask the agent in order to catch the agent providing inaccurate or outright incorrect answers to important questions. At one point Chris did ask an agent about some fine print explanation in the sales brochure, which the agent mangle pretty badly. However the senior should have asked that question, and a dozen more about the various acronyms appearing in the brochure, and how the product worked, etc. Then you might have had an expose; as it was, the episode was disappointing and misleading. It was misleading because the overall tone of the episode was that the industry was built on misleading seniors on EIAs, but Dateline NBC didn’t do nearly enough to prove this point. And that’s why the episode itself was misleading.