One of the silver linings (no pun intended) of turning 50 was, I thought, becoming eligible for membership in the AARP. While I didn’t know much about the specifics of what they do, I had always had a generally positive perception of the organization. My impression in a nutshell? They worked doggedly to serve members’ best interests, they were relentless in advocating their causes to key influencers, and members got great deals on financial products and services.
As it turns out, I should have done my homework before signing up. AARP’s slogan “The Power to Make it Better” doesn’t seem to always apply, at least not when it comes to the products they endorse.
I once received a mailer promising me the lowest auto insurance rates available in New York. Even though I was content at the time with the level of service and coverage I had with GEICO, I figured I’d see how much better the AARP plan could do. I called, I gave my personal details, I was given a quote – which happened to be significantly higher than my existing policy. So much for getting great deals!
Turns out specious claims are not only reserved for AARP-endorsed insurance products. BusinessWeek’s Anne Tergesen makes clear in the magazine’s February 25th issue that, in most instances, the endorsement program that AARP offers on third-party financial products may be a better deal for the AARP than it is for most of its members. Royalties from the sale of financial products in 2006 contributed $400 million to the organization’s $1 billion budget, or almost twice the income of monthly dues.
A spokesperson acknowledged to BW that its products are “not always the cheapest.” That said, he also suggested that they don’t necessarily try to compete solely on price, saying that the organization believes it offers “a higher-quality plan with elements that are not included in a lot of competitive plans” and that the products are “designed in part to serve those who might otherwise be excluded from the market.”
Fair enough. But if that’s the case, the promotional literature needs to come with something akin to one of those “viewer discretion” advisories they flash before those paid programming shows they run in the wee hours of the morning: “The following is a paid product endorsement. AARP advises members that better-suited and better-priced products are likely available elsewhere.”
Retirees are typically people most in need of protection from predators hyping financial services products that are not in their target’s best interest. How ironic – and disturbing – that AARP is complicit in the financial exploitation of its own members. AARP would be strongly advised to review its reputation management practices.
6:36 am
I think this article is right on track. AARP seemed to start as an organization for senior with the best discounts on hotels, car rentals, etc. It is now a sales organization to get money from members to promote its own political aggenda. Long are gone the good deals.