April 17, 2014

Mostly sunny

Company fined, accused of targeting elderly

A Medina businessman is fighting $9,000 in fines levied by the Kansas Insurance Department, which has accused him of sending deceitful advertisements to elderly Kansas residents.

The department also issued a cease and desist order to Matthew Dilday, 36, of Montville Township, after an insurance agent hired his firm to send 3,500 postcard ads to potential clients in Johnson County, Kan.

Dilday’s company, now known primarily as Lead Generating Systems LLC, was fined $5,000 in August as part of a judgment by the Kansas Insurance Department. An earlier fine of $4,000 was levied against the same company in March 2012, when it was doing business as Unlimited Fulfillment Services LLC, according to a news release from Kansas Insurance Commissioner Sandy Praeger.

“Part of our department’s mission is to take action against these illegal solicitations,” Praeger said in the news release, “so that our citizens’ money and insurance guarantees are protected.”

Praegar said the advertisements misled recipients by saying their annuities — pension-like insurance policies — may be reaching their “surrender dates.”

The postcards explain surrender dates are when “an owner may cash in an annuity or make withdrawals without incurring a surrender charge.” The notices also advised recipients to ignore them if they didn’t have annuities.

Dilday said his company, at 620 E. Smith Road, Suite W23, advertises for insurance agents. The ads entice recipients with annuities to call a hotline, which Dilday said would connect the callers with an insurance agent.

His clients sign contracts, he said, accepting responsibility for the contents of the ads he prints and mails. In addition, Dilday said his clients agree to ensure the ads comply with federal, state and local laws.

The client in this case is an insurance agent in Overland Park, Kan.

Kansas Insurance Department attorney John Wine said Dilday has been given several chances to request a hearing on the matter, but has refused.

Wine said Kansas law states insurers are responsible for the contents of advertising, but said that doesn’t mean there aren’t other people jointly responsible.

Dilday’s firm employs 12 people and has mailed 19.4 million similar postcards all across the U.S. since its start in 2008. Since its establishment, Dilday said the company has completed about 4,000 marketing programs worth more than $4 million.

This isn’t the first time Dilday has been the target of legal action.

Florida issued a cease and desist order last year, he said, and Ohio briefly pursued action before backing off.

He said he believes he’s targeted because his company is often mistaken for a similar Medina company that folded after facing similar criticism and legal problems.

In the wake of his firm’s legal battles, Dilday has rebranded several times. Besides Lead Generating Systems and Unlimited Fulfillment Services, his company has been known as Smart Leads, UFS Marketing Services, Annuity Leads and Annuity Leads Today.

He said he’s spent tens of thousands of dollars in legal fees and lost more than $100,000 in sales because of his legal battles.

“I almost had to fold the entire company,” Dilday said.

Contact reporter Nick Glunt at (330) 721-4048 or nglunt@medina-gazette.com.

  • Disappointing Journalism

    How is this seriously on the front page of The Gazette? The only thing “misleading” about all of this is the title of this article! A printing business targeting the elderly, how is that even possible? I understand this is a small town but this is just irresponsible journalism. This article should not have been written to turn a community against this small local business but instead to rally around it and help stop all these misinformed accusations. Shame on you Medina Gazette! nnnThis business does printing for many local Medina businesses. It’s sad to see this poorly researched article written about it. UFS/LGS has been drug through the mud enough by the state of Kansas and Florida already. And they already sued the state of Florida for falsely saying the business is scamming the elderly. They are not targeting anyone. The agents hire them to print and mail. They do not receive any money from the insurance agents other than for what they are hired to do. Print and mail, legally!! If something is not done to the states laws its the insurance agents responsibility, not the printing company’s. As stated in the article, the agents sign a contract saying they are responsible for the postcards and the laws regarding their state. So how this business has been targeted is just plain ignorance on the states part. Its just an example of the state trying to bully a small business who doesn’t have a bunch of money to defend themselves. And now even more sad that the local newspaper is trying to spotlight them for something they’re not a part of. If thats the direction we are going with, maybe next on the agenda should be to target and find responsible businesses that sell guns legally to people who end up committing crimes with them.nnnThis article states the business has 12 employees. Based on the average sized family of 4 people, thats 48 people that will be directly affected by this article. Not including family and friends surrounding these employees. Nick Glunt, I sure hope that if your ever find yourself wrongfully accused and fighting a legal issue that you and you’re family are able to hold it tight to the chest and not have it smeared on the front page of your local newspaper by an irresponsible journalist, like yourself.

  • Unprofessional

    I agree with Disappointing Journalism, in that, it is clear a lack of research was completed prior to the construction of this article. Research does not include just doing interviews only!! It is unfortunate that this company has to suffer at the hands of an irresponsible writer who would rather insert their own opinions in lieu of researching the facts. The disappointing reality is the truth and facts were omitted and the lack of other news worthy scandals were slim, therefore, a story was made here. Bad news gets more publicity than good news or no news as in this scenario. There are many other news-worthy stories in Medina County, but it would take some research and ability to address the actual news that happens instead of ignoring it for political reasons.