HARRISBURG, Pa. (Legal Newsline) -- Acting Pennsylvania Attorney General Bill Ryan's health care section filed a lawsuit on Wednesday against a national dental chain and three of its top company officials over multiple alleged credit and consumer protection law violations.
The civil lawsuit names Allcare Dental & Dentures of Williamsville, N.Y., which closed suddenly in January. The suit also names several other affiliated companies, Allcare President Robert Bates, CEO David Pennington, and Stephen Reny, the CEO of Allcare Dental Management LLC.
"The sudden closure of Allcare offices across Pennsylvania and throughout the country in January has triggered a flood of complaints from hundreds of consumers who prepaid for dental services that were not delivered or were not given the proper disclosures about financing, discounts and other offers," Ryan said. "In addition, Allcare allegedly failed to safeguard or escrow the money it received in consumer prepayments, as required by Pennsylvania's Credit Services Act and a previous settlement between the company and the Attorney General's Office."
The attorney general's office's health care section has received over 800 complaints from consumers about Allcare. Most of the complaints allege that consumer paid $1,000 to $7,000 for dental and denture services from the company, many of them receiving third-party financing for part or all of the treatments, with the money paid in advance to Allcare.
The suit alleges that Allcare acted as a credit services organization when assisting consumers who needed financing for dental care. It also alleges that Allcare used high-pressure sales tactics to convince consumers to agree to expensive treatment plans.
"The law is very clear -- any money paid by consumers to a credit services organization for services that have not yet been provided must be placed in a secure bank account or a bond must be obtained to safeguard the funds," Ryan said. "Without that bond or an escrow account, credit service organizations cannot accept advance payments from consumers."
Ryan's suit alleges that officials for Allcare continued to accept payments even though those officials knew or should have known they would not be able to deliver the products or services customers had purchased.
The suit alleges that Allcare engaged in deceptive and unfair business practices, violated a previous consumer protection settlement and failed to provide consumers with required cancellation notices. In addition, the lawsuit alleges that Bates, Pennington and Reny all had direct and integral roles in the company and should be held personally responsible.
The lawsuit seeks restitution for consumers harmed by the company's unfair business practices with fines and penalties of $1,000 to $5,000 per violation.