Consumer Claims American Income Life Insurance Co. Wrongfully Used Her Account to Pay for Sister’s Policy

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A proposed class action alleges American Income Life Insurance Company fraudulently used a customer’s checking account to complete the policy sign-up process for her sister. 

The 12-page lawsuit in California claims that the plaintiff, an Orange County resident, was charged three times for her sister’s life insurance policy despite having never provided consent to American Income Life Insurance Company to withdraw the funds. Although the plaintiff requested a refund, American Income Life Insurance Company has failed to recoup any of the withdrawals made from the woman’s checking account, the suit alleges. 

According to the complaint, American Income has run afoul of the federal Electronic Funds Transfer Act (ETA) and California’s Unfair Competition Law by debiting customers’ bank accounts without their authorization. 

The plaintiff opened a life insurance policy with the defendant in 2019 and upgraded it two years later before ultimately canceling her policy in September 2021, the lawsuit begins. When upgrading her policy, an agent for American Income asked the woman if she knew any friends or family who might be interested in buying a similar policy, and the plaintiff recommended her sister, who was promptly contacted by the defendant, according to the case. 

The suit says, however, that the plaintiff’s sister did not have a checking account, and as a result the defendant’s agent was unable to complete the sign-up process. According to the case, American Income wrongfully used the plaintiff’s checking account to complete the sign-up process for her sister. 

“As a result, Plaintiff has been charged three (3) times for her sister’s insurance policy,” the complaint says. “Defendant charged Plaintiff on July 2, 2021 for $78.55, September 23, 2021 for $81.15, and October 13, 2021 for $87.37.” 

Under the ETA, preauthorized electronic fund transfers from a customer’s account may only be authorized by a writing signed or otherwise authenticated by the consumer, the suit stresses. 

The lawsuit looks to represent all consumers in the United States from whose bank accounts American Income Life Insurance Company initiated within the last year a recurring automatic electronic fund transfer not authorized in writing by the parties’ original agreement. 

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