The insurance agent you're about to meet isn't just any salesman.

He's a proud graduate of "Annuity University," the seminar program in Colorado run by Tyrone Clark.

That's where Dateline's hidden cameras found salesmen being trained how to sell annuities.

In this internet testimonial, Bill Denny credits his success to Tyrone Clark’s sales secrets.

Bill Denny testimonial: They have helped me to be a tremendous success in the fixed annuities business.

Now, Denny and his assistant are sitting down in a house in Arizona we've wired with hidden cameras -- and he's about to give his pitch to my own aunt Alice.

(hidden camera)

Bill Denny: Everything I do must benefit you.

Aunt Alice has volunteered to help me find out if insurance agents will level with a widow in her 70's when they try to sell so-called equity-indexed annuities.

Bill Denny: All I really do anymore are called EIAs. That stands for equity indexed annuity.

Remember, even though they're pitched as "can't lose" investments, experts like Alabama Securities Director Joe Borg say there are important reasons seniors should think twice before putting their money in indexed annuities.

Borg: You're locking in your money. You can't get it out exactly when you want it. There's high surrender fees if you need it.

The question: will the salesman warn us about all of that?

Bill Denny’s sales pitch begins with a laundry list of fancy-sounding credentials.

Bill Denny: I’ve been to the Institute of Elder Planning Studies, a Certified Annuity Counselor, a member of the Society of Senior Market Professionals …

And before long, it seems like a flash-back to what we heard at Annuity U.

Remember that scare tactic about banks and the FDIC being in trouble?

(hidden camera)

Tyrone Clark: Because FDIC is insolvent. FDIC only has $1.37 per every $100 on deposit.

Bill Denny is about to repeat it.

Bill Denny: As we're sitting here talking, in real cash on hand they have a $1.02 for every $100 deposit in America. And that's it. And they can take 10 years to pay you back.

It's true that FDIC only keeps enough reserves on hand to cover projected bank failures.

But remember, Dateline checked. Nobody's ever lost a dime on an FDIC-insured account.

And it's paid off in days, not years.

Tyrone Clark: Annuities are not liquid? That is baloney …

Remember how Tyrone Clark taught agents how to promise seniors they'd have easy access to their money?

Bill Denny makes the very same pitch.

Bill Denny: Annuities have more liquidity than CDs.

But the key test is: will Bill Denny be honest and make sure my aunt Alice understands the size of those surrender penalties?

Alice Grace: God forbid if my grandson was in a terrible accident and they couldn't cover all the expenses or something, you know what I mean? I'd want to be able to help out on something like that?

Aunt Alice is asking about taking her money out in an emergency.

It's a simple question really.

And it has a simple answer. He could say: "Yes ma'am, it's costly to take money out early. You'd lose a bundle."

But instead of saying that, Bill Denny gives an answer that's muddled with information about taxes and IRAs.

See if this is clear to you.

(Hidden camera)

Bill Denny: Well, the thing is, of course, if you pull a big lump sum out you're going to have a big tax bill anyway.

Alice Grace: Oh.

Bill Denny: You know, it's all taxable. That's-- you never paid taxes on IRA money. But there's a depreciating surrender period right here, because you're under 80. But it goes for 16 years. It starts at 20 and ends up at zero.

Did you catch it?

The information is in there. The annuity he's pushing has a 20-percent surrender penalty.

But here's how fast it goes by.

Bill Denny: It starts at 20 and ends up at zero.

Minnesota Attorney General Lori Swanson says people deserve clear explanations.

Lori Swanson: It's absolutely misleading. I mean, really, they need to deal with these seniors straight.

Chris Hansen: But to be fair, he did show her the brochure and the sliding scale of what the penalties would be.

Lori Swanson: Yeah, he kind of he did. But it was pretty quick. And he's saying "sliding scale." And then the whole time he's talking tax talk. The tax issue has nothing to do with what she's asking.

When Bll Denny returns the next day, hoping to close the deal, I decide it's time to ask some questions of my own.

Chris Hansen: Hello ...

Alice Grace: Come on in ...

Chris Hansen: What's happening?

Alice Grace: Oh, good. This is a gentleman--

Bill Denny: Hi, Bill Denny. Nice to meet you.

Bill Denny doesn't know I’m a reporter yet, or that we're recording with hidden cameras.

Chris Hansen: Listen, you know, her husband died not long ago. This may not seem like a lot of money to you, but it's all she has.

As I start pushing for answers, I have an advantage: I’m not a senior (yet), and I already know the right questions to ask.

Like: how long will Alice’s money really be tied up?

(Hidden camera)

Chris Hansen: And that goes on for how many years before she could access the whole--

Bill Denny: Until the money ran out.

Chris hansen: No, no, no. When would she have access, again, to the full pot of money?

Bill Denny: Oh, the surrender period over?

Chris Hansen: Yeah.

Bill Denny: It's a 16-year surrender period.

Chris Hansen: Sixteen years.

It turns out that Alice’s money will be tied up for 16 years.

And what happens if she has to take her money out early?

I ask Bill Denny about some of the fine print I’d spotted in his brochure.

Chris Hansen: “Minimum guaranteed surrender value. MGSV fee equals 80 percent.” Explain that to me. What does that mean?

Bill Denny: Well, she can-- she could end up losing. Well, here, let's look at the surrender charge...

Bill Denny just admitted Alice could lose money.

And he's pulling out the same table he glossed over the day before.

Bill Denny: That's because she did it in the first year, there's would be 20 percent the first year.

Chris Hansen: OK. So that's what I’m getting at. So she needed to get at this cash, right? She would face in the first year a 20 percent--

Bill Denny: Well, if she ever took it out before the anniversary, that would be crazy.

Chris Hansen: But I still need to ask you, when Alice was talking to you yesterday, every time she'd ask about what she had to go through if she needed to get her hands on that money, you sort of didn't get right to that 20 percent surrender penalty.

Bill Denny: Well, I said this is why I left this with her. I said “Look through here.”

Leaving the brochure, he says, is good enough.

Alabama's Joe Borg doesn't see it that way.

Chris Hansen: Isn't it up to the person buying these products, even if they are elderly, to read all the fine print, if in fact they're going to invest, potentially, their life savings?

Joe Borg: I don't think I’ve ever met anybody who's even read the loan documents on their loan for their houses, let alone the person you trust sitting across the table who has told you, "Trust me. I'm here working for you. I'm a senior financial advisor. Trust me. Sign here."

But when it comes time to tell bill Denny who I really am, it's my turn to be surprised.

Chris Hansen: Well, there's something I got to tell you, Bill, and that's I’m Chris Hansen. And I’m with Dateline NBC.

Bill Denny: Really?

Chris Hansen: --doing a story on sales technique--

Bill Denny: You know what?

Chris Hansen: --when it comes to financial--

Bill Denny: They just called me on Monday.

Chris Hansen: Who did?

Bill Denny: The Denver office called me on Monday and said Dateline NBC is doing an expose on agents.

Chris Hansen: Oh, is that right?

Bill Denny: Yes.

Apparently word is spreading about our undercover sting.

In fact, you may be surprised to hear that Bill Denny thinks it's a good idea.

Chris Hansen: And you understand why we'd be doing a story about this?

Bill Denny: Absolutely. Absolutely. And actually, I actually have to be honest with you and agree with what you're doing because I don't want bad apples out there doing things the wrong way.

Bill Denny warns us that there are plenty of bad apples, but he's not one of them.

Bill Denny: Well, I believe this was totally upfront and truthful. I didn't mislead her in any way.

Bill Denny says he's never had a customer complaint in 15 years of doing business.

And, ever the salesman, he shows just how determined he is to make a sale.

Bill Denny: So are we going to move the money?

Chris Hansen: Not just today.

Later, his lawyer told us that because we limited the time he could spend with Aunt Alice, Denny tried to pack his normal 3-hour sales pitch into 45 minutes.

If he'd had more time, Denny says, he would have given a full explanation of annuities - including those surrender penalties.

MORE FROM DATELINE

Dateline Section Front

Mystery at Lost Dog Road Slideshow: Photos in the Bob Duke case When The Smoke Clears   Sneak peek: When The Smoke Clears Slideshow: The Christie Fleming murder Transcript: Dan Brown and Secrets Of The Lost Symbol Through The Pouring Rain In Plain Sight: Jaycee Dugard Timeline: Jaycee Dugard's kidnapping The Michael Jackson Tapes Dateline Section Front   Add Dateline headlines to your news reader: