Complaint Review: PRIMERICA...TRAVELERS BANK AND TRUST ..AND CITI GROUP - Nationwide

I worked for Primerica for nearly two years. I live in Dover, DE and there are people down here heavily involved in the business. There is this one guy from the area who coaches high school wrestling I think. I've met him before at a wrestling function, but he probably wouldn't remember it. This guy was trying his hardest to to recruit this other guy telling him about the chance to own his own business etc. etc. He was also mentioning the mortages and how he sell them to earn income. I kow this guy has been in Primerica for quite sometime, I think 3-4 years and still not an RVP and is not even close probably. My buddy tells me that he's been trying to recruit him into this scam for a few months and is relentless. The refinance is called a SMART loan, which by the way is far from smart. The fact of the matter is that not all banks charge a pre-payment penalty. The point you make about a bank charging a lower interest rate when they impliment a prepay penalty makes sense. However, try getting a refi from Primerica that's not 1-2% higher on the interest rate even with a prepay penalty. Then try opting out of the prepay penalty and find out what happens. Your rate goes up even higher. The problem I saw was that during this recent refinance blitz many of those in Primerica loans tried to refinance elsewhere and couldn't get out of the Primerica loan because they would have to pay an enormous fee, the prepay fee. A couple of years ago the pre pay fee was for the first 3 years and it decreased every year from 5% to 4% to 3% and then dropped off. They've since lowered the fee to 3, 2 and 1%, but there rates are still much higher. Primerica should seriously be investigated for Predatory Lending. For those of you not aware what that is, it's when Reps (who are uneducated themselves) sell loans to the uneducated consumer. The consumer doesn't know what to ask and the representative from Primerica knows how to induce the consumer into thinking they are getting a good deal. I am ashamed to have been part of this practice, but to be honest the reps, like me, were fairly uneducated as to the mortgage business. You think you are doing what is right at the time, because you are taught/brainwashed into thinking it's right. The trainers and the RVP's teach you how to manipulate the numbers to show net savings etc. for the client. And then we show them were they can put the money not spent to 'supposedly good use.' However, almost all the time, once the sale goes through, the rep doesn't follow up with the client. Some Primerica reps do follow up, but a huge majority do not. They are just looking for the quickest way to get a sale. The Financial needs analysis is a joke as well. It's set up to look like this great report and in a perfect world it would be good. However, the uneducated client knows nothing really about market flucuation so when the rep praises a 12% return on the money, the client of course bites. They show numbers like net worth debt. etc, etc. BUT...THE WHOLE FINANCIAL NEEDS ANALYSIS IS SET UP TO GET AN INSURANCE SALE. THAT'S THE PRIMARY REASON THEY IT'S DONE. During my training, the RVP took very little time in explaining the rest of the FNA, yet spent most of the time working the insurance sales numbers to get to a point where both the client could 'somewhat' afford and where the premium taken would count as a good sale and it would pay the rep well. Probably 90% of the reps never get securities licensed so when they talk about Mutual Funds or rates of return on investments, that in itself is illegal. The problem is that they talk a good game because they are taught to do that. Some are very good at it and could sell ice cream to an eskimo. My point is that Primerica Reps are taught to prey on the uneducated, in fact they use the phrase, 'They don't know what they don't know'. It's kind of like if they don't ask don't tell. That's the simple truth and no one can tell me different. I was there long enough to witness it and those that are knew will come to this conclusion as well. They then have two choices, stay and deceive or leave and do something else while they still have pride.

I don't know how long ago this complaint was made, but having done a number of Mortgages with PFS/Citigroup, including my own before I joined the company, I can tell you that they ALWAYS explan the pre-payment penalty up front, and if they aren't they should be. The goal of PFS is to leave the consumer in a better position than they were before and educate them about money and how it works. Unfortunately, that education doesn't always take. So, to prevent the consumer from placing themselves in a bad situation by listening to a shyster who is just out to get their money, Citigroup puts a 3 year (in my state) prepayment penalty that goes down every year. yes, it benefits PFS and Citi by keeping you as a customer, but it's designed to help people, nit cost them additional money.

I have worked in the mortgage industry for 7 yrs, including one year with Traveler's Bank and Trust. I'd venture to say that EVERY mortgage company in America has prepayment penalties on SOME of their loans. A loan with a prepayment penalty will have a lower interest rate than one without a prepayment penalty: --A prepayment penalty guarantees the bank will make some money even if the loan is refinanced within a short amout of time. With this guarantee, they will offer a lower rate in return. --If there is no prepayment penalty, the bank will hope you keep the loan so it can collect the interest over the life of the loan and eventually cover their costs (which are significant) and turn a profit. With no guarantee, the bank will charge a higher rate to compensate for the risk of a quick refinance. Unfortunately, most sales people will not take the time to present all of your options. Your only recourse is to shop around, then let them fight for your business. BOTTOM LINE: Shop around and read your loan documents thoroughly before you sign them!!

Prepayment penalties are fewer and fewer. Usually, they are only thrown in by banks who plan on securitizing the mortgage. Otherwise, it is an indirect way of price gouging and/or preventing competition. But regardless of the normalcy of prepayment penalties, the issue is whether or not the Primerica advisor, as an unofficial advisor, (which they and their website conveniently state, in order to avoid lawsuits as in this case) bothered trying to do what was best for the customer. They are simply trained to sell their products--not to do a cost/benefit analysis or plan with risk in mind. A professional planner would have asked if there were any possibility of a location change in the near future. With that in mind the planner would have helped him shop around for a loan that wouldn't have the prepayment risk. They are easy to find and often cheaper.

>Darrell Alot of banks have a pre payment penalty. Most do not. >The reason for this is because of the costs associated with assuming the loan. Do you even know what a prepayment penalty is? It doesn't sounds like it. The cost of servicing a bank loan is paid for by the consumer via INTEREST. The prepayment penalty is assessed if you pay off your loan early (thus freeing up the lender's money to lend to someone else). It serves no useful purpose to the consumer and most mortgage companies no longer use them. Primerica still does, 100% of the time. I guess it must be right for the consumer then? >I'm sure you either signed or initaled that this pre payment penalty was explained to me. Right...as long as it's in the "fine print" you all are OK with assessing it on the consumer. When I asked the PFAs if their loan had a prepayment penalty, they replied that it would be "in the papers".. of course then they try to pull the wool over your eyes by saying you'll never need to pay the loan off early because the terms are SO good! Wrong.

Darrell Alot of banks have a pre payment penalty. The reason for this is because of the costs associated with assuming the loan. Don't you pay a service station to service your car? You are paying The bank to service your loan. You really need to read your contracts more carefully because I'm sure you either signed or initaled that this pre payment penalty was explained to me.

You did a *little* research? You must have done way TOO little research. NOT all banks have a prepayment penalty, like you spewed. In fact, MOST banks and MOST mortgage lenders don't! It's legal and it's in the contract. PFS agents are taught not to mention it specifically and that's their right. But you tell me, if you refinance, wouldn't that tidbit of information be nice to know up front? You said: "The prepayment penalty is something banks do to make sure they make a certain amout of profit off thier investments. This is the way loaning money works. They loan it to you and you pay interest." Now I don't even think you know what a prepayment penalty is. "They have taught us so much about our budget and future savings." Most of what they taught you is misinformation. Most likely, the person who came into your home is a minimally licensed part-time financial hack who needs to make a sale to recover his/her investment. The information they learned was not from a school, but from a multi-level marketing cheerleading session, just like the kind at Amway. "The things they show the public are things that should be a course in high school. Yet we are not taught these thing and therefore are easly ripped off by the people that we trust with our money." Actually, much of what Primerica teaches you is misinformation ("interest rate doesn't matter" sound familiar?). Based on this misinformation, they try to sell you a product that is by no means viable, but people fall for it because the only "education" they received has been from a part-time insurance salesperson trying to make a sale. I could 'educate' you on the Brooklyn Bridge and then try to sell it to you, but that doesn't make it right. "Primerica EDUCATES you first. Then they show you TOOLS to use. They do all this FREE." Usually, the financial needs analysis is reserved for their clients. If you don't do business with them (buy overpriced insurance, refinance your home loan at a higher rate, invest in loaded, high-fee mutual funds), you are no longer a client per se, and they will take the FNA and go home. The only tool they show you is the FNA, which is a tool to oversell one or more of their products, based on how much artificial need they can generate for you. Gail, you sound like a Primerica shill. If you really are a satisfied client, why are you out on a site called RipOffReport looking for reports about the company?

You did a *little* research? You must have done way TOO little research. NOT all banks have a prepayment penalty, like you spewed. In fact, MOST banks and MOST mortgage lenders don't! It's legal and it's in the contract. PFS agents are taught not to mention it specifically and that's their right. But you tell me, if you refinance, wouldn't that tidbit of information be nice to know up front? You said: "The prepayment penalty is something banks do to make sure they make a certain amout of profit off thier investments. This is the way loaning money works. They loan it to you and you pay interest." Now I don't even think you know what a prepayment penalty is. "They have taught us so much about our budget and future savings." Most of what they taught you is misinformation. Most likely, the person who came into your home is a minimally licensed part-time financial hack who needs to make a sale to recover his/her investment. The information they learned was not from a school, but from a multi-level marketing cheerleading session, just like the kind at Amway. "The things they show the public are things that should be a course in high school. Yet we are not taught these thing and therefore are easly ripped off by the people that we trust with our money." Actually, much of what Primerica teaches you is misinformation ("interest rate doesn't matter" sound familiar?). Based on this misinformation, they try to sell you a product that is by no means viable, but people fall for it because the only "education" they received has been from a part-time insurance salesperson trying to make a sale. I could 'educate' you on the Brooklyn Bridge and then try to sell it to you, but that doesn't make it right. "Primerica EDUCATES you first. Then they show you TOOLS to use. They do all this FREE." Usually, the financial needs analysis is reserved for their clients. If you don't do business with them (buy overpriced insurance, refinance your home loan at a higher rate, invest in loaded, high-fee mutual funds), you are no longer a client per se, and they will take the FNA and go home. The only tool they show you is the FNA, which is a tool to oversell one or more of their products, based on how much artificial need they can generate for you. Gail, you sound like a Primerica shill. If you really are a satisfied client, why are you out on a site called RipOffReport looking for reports about the company?

You did a *little* research? You must have done way TOO little research. NOT all banks have a prepayment penalty, like you spewed. In fact, MOST banks and MOST mortgage lenders don't! It's legal and it's in the contract. PFS agents are taught not to mention it specifically and that's their right. But you tell me, if you refinance, wouldn't that tidbit of information be nice to know up front? You said: "The prepayment penalty is something banks do to make sure they make a certain amout of profit off thier investments. This is the way loaning money works. They loan it to you and you pay interest." Now I don't even think you know what a prepayment penalty is. "They have taught us so much about our budget and future savings." Most of what they taught you is misinformation. Most likely, the person who came into your home is a minimally licensed part-time financial hack who needs to make a sale to recover his/her investment. The information they learned was not from a school, but from a multi-level marketing cheerleading session, just like the kind at Amway. "The things they show the public are things that should be a course in high school. Yet we are not taught these thing and therefore are easly ripped off by the people that we trust with our money." Actually, much of what Primerica teaches you is misinformation ("interest rate doesn't matter" sound familiar?). Based on this misinformation, they try to sell you a product that is by no means viable, but people fall for it because the only "education" they received has been from a part-time insurance salesperson trying to make a sale. I could 'educate' you on the Brooklyn Bridge and then try to sell it to you, but that doesn't make it right. "Primerica EDUCATES you first. Then they show you TOOLS to use. They do all this FREE." Usually, the financial needs analysis is reserved for their clients. If you don't do business with them (buy overpriced insurance, refinance your home loan at a higher rate, invest in loaded, high-fee mutual funds), you are no longer a client per se, and they will take the FNA and go home. The only tool they show you is the FNA, which is a tool to oversell one or more of their products, based on how much artificial need they can generate for you. Gail, you sound like a Primerica shill. If you really are a satisfied client, why are you out on a site called RipOffReport looking for reports about the company?

You did a *little* research? You must have done way TOO little research. NOT all banks have a prepayment penalty, like you spewed. In fact, MOST banks and MOST mortgage lenders don't! It's legal and it's in the contract. PFS agents are taught not to mention it specifically and that's their right. But you tell me, if you refinance, wouldn't that tidbit of information be nice to know up front? You said: "The prepayment penalty is something banks do to make sure they make a certain amout of profit off thier investments. This is the way loaning money works. They loan it to you and you pay interest." Now I don't even think you know what a prepayment penalty is. "They have taught us so much about our budget and future savings." Most of what they taught you is misinformation. Most likely, the person who came into your home is a minimally licensed part-time financial hack who needs to make a sale to recover his/her investment. The information they learned was not from a school, but from a multi-level marketing cheerleading session, just like the kind at Amway. "The things they show the public are things that should be a course in high school. Yet we are not taught these thing and therefore are easly ripped off by the people that we trust with our money." Actually, much of what Primerica teaches you is misinformation ("interest rate doesn't matter" sound familiar?). Based on this misinformation, they try to sell you a product that is by no means viable, but people fall for it because the only "education" they received has been from a part-time insurance salesperson trying to make a sale. I could 'educate' you on the Brooklyn Bridge and then try to sell it to you, but that doesn't make it right. "Primerica EDUCATES you first. Then they show you TOOLS to use. They do all this FREE." Usually, the financial needs analysis is reserved for their clients. If you don't do business with them (buy overpriced insurance, refinance your home loan at a higher rate, invest in loaded, high-fee mutual funds), you are no longer a client per se, and they will take the FNA and go home. The only tool they show you is the FNA, which is a tool to oversell one or more of their products, based on how much artificial need they can generate for you. Gail, you sound like a Primerica shill. If you really are a satisfied client, why are you out on a site called RipOffReport looking for reports about the company?

My mother and I bought a house together. We tried to refinance and found out that there was a prepayment penalty. We did a little reserch and found out that ALL BANKS have this clause and that it IS legal. The prepayment penalty is something banks do to make sure they make a certain amout of profit off thier investments. This is the way loaning money works. They loan it to you and you pay interest. The interest is thier profit. That is how a bank makes money. The prepayment penalty is thier way of protecting thier bottom line. They also are REQUIRED to disclose all to you at closing. Also we have recently gotten in touch with primerica and they have gone out of thier way to help us. They have taught us so much about our budget and future savings. The things they show the public are things that should be a course in high school. Yet we are not taught these thing and therefore are easly ripped off by the people that we trust with our money. Primerica EDUCATES you first. Then they show you TOOLS to use. They do all this FREE. If you choose to use thier tools great. But you still READ THE FINE PRINT. If there is something you don't like TELL them. If you don't contest anything and sign you have told them you agree to ALL TERMS.

This email is a rebuttal to RipOff #3247.
It was sent by @Rebuttal_Name@ at [email protected].

STAY AWAY FROM THE CRIME RING OF PRIMERICA...TRAVELERS BANK AND TRUST ..& CITI GROUP (#3247)

They filed the following rebuttal to the above Rip-Off Report:

Their email: [email protected]
Their relationship to the company: Consumer Suggestion

Rebuttal:
Darrell, Did you read the contract before you signed it? The prepayment penalty is in there and probably explained to you at closing. There is one thing you need to know for the future. Don't buy another house. Because you won't read the contract that you will sign for it either!