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What's happening to the policyholders who were cheated by the Prudential Insurance Co. of America?

Not enough, some of them say. They think they're getting a runaround.

In 1996, Prudential confessed to bilking unknown numbers of customers. The company agreed to $60 million in fines and has set aside $2 billion for restitution. Policyholders were eligible for some sort of offer if they bought cash-value insurance from Pru any time from 1982 through 1995.

Rene Schreiner, 37, a book editor in Prospect Heights, Ill., started complaining about her Pru policy almost from the day she bought it in 1988.

An agent had persuaded her to replace two older policies with a newer one, she says. When she got the policy, however, she discovered that it contained much less cash value than the old ones did (the agent had led her to believe there would be no loss). Also, the cash in the new policy wasn't invested in stocks, as she'd asked.

She complained but got nowhere. Her agent had left. New agents wanted only to sell her new insurance. In May 1997, she got a notice about the Pru settlement. In August, she filed a claim.

Pru offers a form of alternative dispute resolution (ADR), for people who were wronged. You might get part of your money or your old policy back.

When filing her claim, Ms. Schreiner followed the form Pru sent her -- checking off the boxes that defined how she'd been misled and telling her story in writing, in more detail. Over the following year, Pru sent her occasional letters, saying that it was working on her case. "Then I got a letter I can't even read without getting angry," Ms. Schreiner told my associate, Kate O'Brien Ahlers. It came in June 1998, and said that Pru was "unable to determine the nature of the complaint you would like us to address."

She had 30 days to "bring additional facts . . . to our attention." If she didn't respond in time, Pru said, her case could be closed. Mystified, she called Pru's customer hot line to ask what additional facts were needed.

The customer representative had no idea. She told Ms. Schreiner simply to restate her claim in different words.

Kay Justice, 47, a travel agent in Newport News, Va., got the same mystifying letter. She and her husband each bought policies that they thought were retirement-investment plans (one of the grounds for restitution). "Pru didn't send me anything that explains what else to do," Mrs. Justice says. Her husband hasn't heard anything yet. She feels worn down by her problems with Pru, and isn't sure it's worth it to do anything more.

Pru spokesperson Robert DeFillippo says this letter went to 60,000 people "who sent in claims that had not stated in what ways they were misled." He says the letter was meant to give them a second chance. "We've had no complaints," he said.

Oops. He changed his tune when I faxed him a copy of Mrs. Justice's and Ms. Schreiner's claims. After a review, Pru concluded that the policyholders had, indeed, stated how they were misled -- so they shouldn't have gotten the tell-us-more letter.

Who knows how many more of the 60,000 people shouldn't have gotten it, either? Some 23,000 have written back, DeFillippo says. The other 37,000 will still have their claims considered, he adds, even though the letter leads you to think your case will be closed. DeFillippo says the letter is "unclear."

You might find hard proof of your claim in your original application for insurance, which you'll find in the back of your insurance policy, says Rick Sabo of Money Concepts in Gibsonia, Pa. Sabo helps bilked policyholders develop their cases.

One question on the application asks if the policy was a replacement. You're supposed to say yes, if you surrendered, or borrowed from, an old policy to get your new one. If the agent answered that question no, it's proof of fraud, Sabo says.

There may also be proof in your personal file at Prudential, says Mike Weaver, an ex-Prudential agent who runs a Web site to help people navigate their claims ( symbol)riverbend).

When I first wrote about this settlement, in 1997, DeFillippo said that Pru would send claimants copies of their files. Oops again. Ms. Schreiner asked for her file and Pru said no.

Now, DeFillippo says that Pru will go through your file for you. You'll get a copy only if you're unhappy with what Pru offers you, and decide to appeal. If you need it to refresh your memory, so you can make a better case, tough luck.

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