FTC shuts down telemarketing scam

By Michael P. Tremoglie | Jun 18, 2012

WASHINGTON (Legal Newsline) -- The Federal Trade Commission has halted a telemarketing scam that allegedly deceived people trying to buy affordable health insurance into buying worthless medical discount plans.

According to the FTC, Health Care One and its affiliates allegedly deceived potential customers by marketing medical discount plans as government-endorsed health insurance. They claimed they could provide substantial savings. But the FTC alleged that the discount plans were not insurance, were not widely accepted by healthcare providers, and did not provide the promised healthcare savings to consumers.

Consumers were not informed that their program was not health insurance until after consumers signed up for the program and paid hundreds of dollars in fees. If they subsequently tried to cancel their enrollment they found it difficult or impossible to obtain refunds.

The companies, according to the FTC's complaint filed in Central District of California, also falsely claimed that their program was widely accepted by healthcare providers in consumers' local communities. The Health Care One companies touted their services in television commercials and radio ads. They promised "100% satisfaction" and a money-back guarantee.

Health Care One LLC and the three affiliated companies agreed to settlements that bar them from any healthcare-related enterprise and from selling goods or services related to healthcare. The settlements also prohibit them from violating the Telemarketing Sales Rule.

The FTC announced the settlement orders also require the defendants to surrender assets including the proceeds from the sale of an Aston Martin, a Maserati, a yacht, and two motorcycles.

According to the announcement, "The orders also prohibit the defendants from making misrepresentations in connection with the sale of any good or service, including falsely representing: that a program is insurance; affiliation with, or endorsement or sponsorship by, the federal government; that purchase of a good or service will result in substantial savings to consumers; any material aspect of the good or service; the total costs associated with the good or service; and any material refund and cancellation policies, including, but not limited to, the likelihood of a consumer obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted to the consumer. The orders also bar the defendants from violating the Telemarketing Sales Rule, which prohibits misrepresentations in telephone sales and the making of unsolicited automated telemarketing calls."

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