November 20, 2014

Medina
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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.