Marty Caffrey describes his mom Janice Bennet, 92, as “sharp as a whip.”
Caffrey helps her manage her modest investments. Bennet has a hand in all the moves, and she receives regular email notifications about her accounts.
In June, Bennet received an unexpected email from The Vanguard Group. It was to verify the beneficiary designation on her IRA.
The Little Egg Harbor woman has eight children, 16 grandchildren and five great-grandchildren — soon to be six. As part of her estate plan, she said, all eight of her children are named as equal beneficiaries.
But the Vanguard email said her IRA was to go to Lemurian Fellowship of Ramona, Calif.
Bennet and Caffrey said they had never heard of Lemurian Fellowship. They asked the other children, who also said they had never heard of the group.
They looked online. The website describes the group as a “nondenominational, nonprofit religious corporation,” and a “School of Universal Philosophy established under the direction and guidance of the Lemurian Brotherhood, one of the original Mystery Schools of this human life wave.”
Knowing something wasn’t right, Bennet called Vanguard. There was indeed a beneficiary change, Bennet said Vanguard told her.
Nonsense, Bennet said, and she did what she needed to do put her eight children back as the account beneficiaries.
But Bennet and Caffrey wanted to how this change happened. Was it a scam?
“We find it troublesome if there is hacking of elderly accounts to change beneficiaries,” Caffrey said.
Caffrey was concerned that if this happened to his mother, it could be happening to others.
Had Bennet not opened that email, and had she not paid attention to the details of her account, upon her death, her money very well could have gone to an organization she had never heard of.
So Bennet asked Vanguard for a copy of the form that made the beneficiary change to the Lemurian Fellowship.
She also requested the case be forwarded to Vanguard’s fraud department.
Several weeks passed, and Bennet didn’t receive a copy of the Lemurian beneficiary form. She hadn’t heard from Vanguard’s fraud department, either.
That’s when they contacted Bamboozled.
MISTAKES HAPPEN, BUT…
After reviewing Bennet’s story, we reached out to Vanguard for more information.
While it looked at the case, we contacted the folks at the Lemurian Fellowship. Via email, a representative said he was willing to help determine what happened.
But before we could pursue that, Vanguard had an answer.
Caffrey said a company rep called his mother.
“They said they had a processing error in December of 2014, where another client’s account was confused with my mother’s,” Caffrey said. “They were apologetic. They said they were ‘appalled’ and ’embarrassed.”
Caffrey said there was apparently a signed beneficiary change request from someone who had a “substantially similar” name and account number as Bennet.
“They said they’re going to do a whole review and they’re talking through the process and having some tough conversations with the people who were on the phone with my mother and how they handled it,” Caffrey said.
Still, Caffrey called it “alarming,” noting that in this case, what’s being called an innocent processing error is just as scary as an intentional scam.
Vanguard wouldn’t give us any details about what happened here, but it said customers can update their beneficiaries online, by phone or by mail.
It also said the company sends beneficiary confirmations every three years via whatever channel the investor has established, such as email or traditional mail.
And, when a beneficiary is changed or updated, a confirmation is sent to the investor, a spokeswoman said.
That’s interesting because Bennet said she never received a notification when her account’s beneficiary was changed in 2014. We guess it’s possible she missed an email.
But had Bennet not noticed the three-year beneficiary confirmation email, the Lemurian Fellowship could have had a nice surprise coming to it.
Bennet said her story should be a warning to anyone who has accounts that are transferred upon death by beneficiary designation.
“The elderly and their families should immediately check to make sure beneficiary designations are accurate and have not been altered for investment accounts and life insurance policies,” Bennet said. “If this happened to me, it could happen to anybody and probably has.”
Sound advice, and it applies to investors of any age.
Indeed, investors are often reminded to check their beneficiary designations when they have a major life change, such as a divorce, the death of an heir or the birth of a child.
But to make sure no one has accidentally arranged for your money to go to a charity you’ve never heard of?
Yes, that’s now on the list of reasons to check your beneficiary designations regularly.
Have you been Bamboozled? Reach Karin Price Mueller at Bamboozled@NJAdvanceMedia.com. Follow her on Twitter @KPMueller. Find Bamboozled on Facebook. Mueller is also the founder of NJMoneyHelp.com. Stay informed and sign up for NJMoneyHelp.com’s weekly e-newsletter.