Seniors' Savings Put Out Of Reach

For Dorese Ebbert, Zelda Brodsky and Michael Calabrese, it all started with a newspaper ad offering a guaranteed one year certificate of deposit with a company called Fidelity Insured Deposits. As CBS News Correspondent Sandra Hughes reports, the incredible interest rate was the hook.

And what did 55-year-old Ebbert get?

"I ended up purchasing, unbeknownst to me, an annuity for 48 years," says Ebbert. "I had no idea."

And when would 81-year-old Brodsky see her investment mature?

"I looked at the paper and it said 2026," says Brodsky. "And I couldn't believe it."

Calabrese wrote a check for much of his retirement; almost $100,000.

And what does he think about people who prey on senior citizens?

"Well, first of all I think they're sleaze balls," he says.

And they're not alone. Dozens of other senior citizens have called the California Department of Corporations saying they too have been bamboozled by Fidelity Insured Deposits, some saying they thought they were buying from the real Fidelity Investment Company.

Court documents show the state accuses this Fidelity of running a classic bait-and-switch scheme: offer the high rate CD to get someone in the door, then sell them a long-term annuity.

"The idea of selling a variable annuity that is going to mature in 15 years is ridiculous," says William Wood of the Department of Corporations.

While the owners of Fidelity Insured Deposits wouldn't talk to CBS, in a written statement they contend "there is nothing wrongful about advertising high yields on CDs in order to target customers who might buy annuities."

In court, Fidelity proved most witnesses had signed papers clearly stating what type of investment they were getting.

Fidelity owner Janet Reiswig may find it funny but the government doesn't. It's trying to educate seniors about companies like Fidelity, which, according to the state, sold almost 1000 annuities from February until August of this year.

"They know you're not going to read a stack of papers this high," says Brodsky.

She was lucky. After the state investigation, she got her money back. Had Brodsky waited for the investment to mature, she would have been 95 years old.