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What should a Prudential customer do?

If you're a Prudential customer who hasn't yet decided whether to participate in the proposed settlement, it's time to get on with it.

If you're unclear as to when the information is due back to the company, don't feel bad, you're not alone. The people making up the rules are unclear on that as well.

Your best bet is to get the information in as soon as you can and to have it in to the company - not just postmarked - no later than June 10. That means you should send it off at least several days before the 10th if you are sending it by conventional mail.

The deadline was originally June 1. A company spokesman said a few days before June 1 that a 10-day extension had been added for all participants. He said that meant it had to be postmarked by then.

But the main law firm representing claimants on the case, Milberg Weiss, says it should be in to the company by June 11. The company says it isn't sure if the 10-day extension ends on June 10 or 11.

The law firm and the company aren't the only ones getting their signals crossed. The staff handling consumer request for information on the 800-line set up by the company was giving out conflicting information as well on the deadline.

So, what's the problem?

It seems regulators from Washington state requested an extension about a week before the June 1 deadline and the company decided to grant it not just for Washington state residents, but all participants. Company officials later said that information was not as widely distributed as it should have been.

If you are a Prudential customer and you never received information about the settlement process, you should call the company to let them know.

Robert DeFillippo, the company spokesman, also said that if you are a Prudential customer and you never received information about the settlement process, you should call the company to let them know.

Or, if you lost the information, you can call the company to let them know and they will send you another, he says. People in either of these two categories can fax or call the company with the information by the end of the grace period. Everyone else must send it by mail.

Confusing? You bet. There is bound to be some of that in any case this size, but it's unclear whether the 800-number operators are getting the information they need to communicate effectively with customers.

We've had one reader say he requested forms via the 800-number twice. He still had not received them by June 1, the original deadline.

Some guidance

Regulators have been concerned that potential claimants have not had enough time to understand the information and make a decision as to whether they should participate.

The company has sent out tons of written material and has staffed a large team of people to help counsel people as they make their decision.

"The biggest problem is that, by the time you get all the information you need to make a decision, you've already made a decision."

But some critics say they haven't gone far enough. Weiss Ratings Inc., a Florida-based firm that has been in the business of analyzing financial companies for more than twenty years, is one of those critics.

Weiss recently released a report that offers Prudential customers some guidance. The free report is available on the INN web site in its entirety. Those who would like an original copy from the company, which cost $2 for shipping and handling, can call 1-800-289-9222.

Weiss officials say Prudential should have done more to help their customers understand the options being presented under the settlement plan.

"The biggest problem is that, by the time you get all the information you need to make a decision, you've already made a decision," says Martin D. Weiss, the founder of Weiss Ratings.

In other words, by June 11 you can opt for an accelerated dispute resolution process or basic claim relief. If you select the former, then your next step is to fill out forms supplied by the company elaborating on your claim. If you select the basic claim relief, then the company will send you information on the enhanced products you can buy.

But Weiss wonders how consumers can decide between the options if they don't have all the information they need on the enhanced products.

"To comparison shop, you need to have that specific information on their products," he said. "Full information on the benefits and the costs is not being provided. They are merely titillating you with the information on the product enhancements. They may be of excellent value, but we really don't know."

When is enough, enough?

Weiss says it would have been better for the company to allow people to make a decision after they received all the information.

Prudential officials say they are exasperated by such assertions. They say they have done everything they are legally allowed to do to help their customers make up their minds.

Weiss agrees that customers have received lots of information, but he says it is not clear enough and that the operators have not been able to provide as much additional information as is needed.

"We tried to call the supposedly independent support team, which has its own toll-free number. We asked them questions with regard to the specific products and they told us we could not get that information until we made a selection," Weiss said.

Choices, choices, choices

So, what should the average Prudential customer do?

"For the average person, it is very simple," says Weiss. "If you feel you were deceived or misled by Prudential, you should check off ADR [accelerated dispute resolution], even if you don't have proof. Even if you are unsure, but you feel you might have been misled, still check off the ADR process."

"Only if you are reasonably sure you have never been deceived by Prudential, should you request the other information," Weiss said.

Weiss said those choosing to go with the enhanced products should use caution.

"The first problem is that, in order to take advantage of the other, so-called enhanced products, you have to shell out more money. You can't replace what you already have. You can't even use cash value from what you have. You have to shell out fresh cash," Weiss said.

"The second problem - and this is the killer - is that after you've asked for the information, you're committed to that decision. So, by the time you've asked for the information you need to make a decision, you've waived the ADR process. It's tricky."

Consumers who do decide to go ahead with the enhanced products should do standard comparison shopping even after they receive all the information.

"Ask yourself whether you really need and want that product," Weiss said. "Then, if you do, ask yourself whether this is the best deal in the marketplace for you. Finally, ask yourself whether you can get an equivalent product from a higher-rated company.

Currently, Weiss rates Prudential at B minus.

"That's not bad, but it's not very good either," Weiss said.

Lemons into lemonade for Prudential

Weiss blames the regulators for allowing Prudential to proceed this way. As for Prudential, he says it's a classic example of a company "turning lemons into lemonade."

"In effect, this will drum up a lot more business for them," he said.

The only exception to the advice above is policyholders with extremely large accounts or a large amount of cash value, in the amount of hundreds of thousands of dollars or more.

"If you are a very substantial policyholder, you are probably better off checking neither and going to see your own attorney," Weiss said. "We didn't put that in the report, because most people with that much money have already done that. They don't need our advice. We're addressing this report to the other 99 percent of the people out there."

Weiss says his company decided to issue the report because the company was receiving so many calls from Prudential policyholders who were confused.

"They didn't know what to do, so we decided to address it all at once," he said.

Weiss is not alone in his criticism of Prudential. The insurance commissioner in California, someone who is often criticized himself for being too close to the industry, has been battling with Prudential over the consumer outreach process there.

Chuck Quackenbush, the commissioner, had his staff design an ad campaign to let the folks in his state know about the restitution process. Prudential didn't like the ads and so it obtained a restraining order from a New Jersey judge ordering the California Insurance Department to pull the ads and rework the language.

Quackenbush says that it's more than a debate over language, that Prudential's actions constitute interference with the consumer outreach process.

In addition to getting the ads pulled, Prudential got the judge to seal the record, so that California officials can't even discuss the specific language in the rejected ads.

As for the Weiss report, DeFillippo said he has not seen the report, and so could not comment on the specifics of Weiss' advice. But he questioned Weiss Ratings' decision to charge $2 for the report.

"It reminds me of that operation that says "send us $5 and we'll get you a Social Security number,' when all you have to do is call Social Security and get it for free" he said. "We've found the biggest question people have is 'what should I do?' And, ultimately, the customer has to decide. We can't answer that for them. They have to answer that for themselves."

Apparently, hundreds of thousands of customers have been able to answer that question. The number of responses is at least 330,000 and could be as high, or higher than 700,000, a number reported in The Wall Street Journal. Prudential officials disputed that report, but declined to give the correct number. The company says it will release the officials figures on the number of responses until the end of the restitution program.

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