Chris Rizo Apr. 14, 2008, 1:28pm
AUSTIN (Legal Newsline)-Texas Attorney General Greg Abbott on Monday accused an Austin company of selling fraudulent discount health plans to pregnant women who lacked maternity insurance.
In a complaint filed Monday in Travis County District Court, Abbott said AHCO Direct, LLC, and its operators Brian McDonald and Aaron Bouren promised medical cost coverage, but provided neither healthcare discounts nor medical benefits.
Calls to AHCO Direct were not returned.
The attorney general said the company promised their policies would cover up to 60 percent of maternity-related costs though their "MaternityCard" for such things as doctors' visits, sonograms, prescriptions and other prenatal care.
"The Web site represents that MaternityCard 'slashes' costs by 0 percent to 60 percent," the 20-page attorney general's complaint said, adding that "consumers pay AHCO large fees, and receive no benefits in return."
More than 140 consumers complained to the attorney general's office and the Better Business Bureau about the company, the AG's office said.
"These defendants are charged with organizing a scheme to exploit vulnerable, expectant mothers," Abbott said in a statement.
The attorney general is seeking customer refunds and civil penalties of up to $20,000 per violation of the Texas Deceptive Practices-Consumer Protection Act, according to court papers.
The civil complaint alleges that when consumers complained to AHCO about their insurance plan, they were allegedly told to continue paying the monthly membership fee and were told that their healthcare savings would be realized at the time of delivery and at later hospital visits.
Dissatisfied consumers who sought to discontinue their plans faced a $250 cancellation fee unless they agreed to stay on the plan for at least 12 months, despite the company promising that consumers would save at least the cost of their yearly membership or AHCO would pay the difference plus $200, the complaint said.