FTC Shuts Down Healthcare Scam that Targeted Seniors and Non-English Speakers
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FTC Shuts Down Healthcare Scam that Targeted Seniors and Non-English Speakers

September 12, 2014

The Federal Trade Commission (FTC) shuts down two healthcare scams that targeted, and stole money from, senior citizens and non-English speakers.

Both scams tricked victims into purchasing phony discount cards that telemarketers said would either provide them health insurance or substantial discounts on their healthcare costs. The cards cost some victims hundreds of dollars and provided no insurance benefits or discounts.

AFD Medical

According to a 2013 FTC complaint, ADF Medical, comprised of 10 defendants, used a call center in Montreal, Canada to pitch prescription drug discount cards that they said would provide consumers with substantial discounts or even free prescription drugs. Telemarketers also told victims they had to purchase the $299 card to continue receiving Medicare, Social Security and other medical insurance benefits.

The scheme bilked $1.091 million from consumers.

Under the settlement orders, the defendants are barred from telemarketing, selling healthcare-related benefits and permanently prohibited from misrepresenting any good or service, benefitting from consumers' personal information and failing to dispose of such information properly.

The settlement order also imposed financial judgments, many of which were suspended because the defendants lacked the funding or assets.

Partners in Healthcare

Similarly, the court also temporarily halted a scheme that tricked Spanish-speaking consumers into buying worthless discount cards that telemarketers said would qualify them for buying insurance under the Affordable Care Act.

According to the FTC complaint, Partners in Health targeted consumers who submitted their information to lead-generation websites that claimed to provide information about health insurance. Many needed insurance, had high premiums or preexisting medical conditions. Others responded by telephone after hearing Spanish-language radio ads that falsely claimed the discount card was an ACA-qualified health plan.

While telemarketers told victims that the card would cover doctor and emergency room visits and were charged monthly payments for these services, the discount cards did absolutely nothing and they were left uninsured.

In late August, a court issued a temporary restraining order to stop the scheme and froze the defendants' assets pending litigation.