The Federal Trade Commission has halted a telemarketing scam that allegedly tricked consumers who were seeking affordable health insurance into buying worthless medical discount plans...
WASHINGTON, June 14 -- The Federal Trade Commission issued the following news release:
The Federal Trade Commission has halted a telemarketing scam that allegedly tricked consumers who were seeking affordable health insurance into buying worthless medical discount plans. Health Care One LLC and three affiliated companies agreed to settlements that will bar them from any healthcare-related enterprise and from selling goods or services related to healthcare. The settlements also prohibit the defendants from violating the Telemarketing Sales Rule and require them to turn over their ill-gotten gains.
The settlement orders with Health Care One, Americans4Healthcare Inc. (http://www.ftc.gov/os/caselist/1023071/120614healthcareoneellmanstip.pdf), Elite Business Solutions, Inc. (http://www.ftc.gov/os/caselist/1023071/120614healthcareonefreemanstip.pdf), Mile High Enterprise Inc. (http://www.ftc.gov/os/caselist/1023071/120614healthcareonelovingstip.pdf), and their principals resolve a complaint filed by the FTC in August 2010 as part of an agency crackdown on scams targeting Americans without health insurance (http://www.ftc.gov/opa/2010/08/hustle1.shtm).
Health Care One and its affiliates allegedly deceived consumers by marketing medical discount plans as government-endorsed health insurance and claiming they would deliver substantial savings on consumers' healthcare costs (http://www.ftc.gov/os/caselist/1023071/100811healthcareonecmpt.pdf). According to the FTC's complaint, filed in Central District of California, the companies 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.
However, the FTC alleged that Health Care One's discount plans were not insurance, were not widely accepted by healthcare providers, and did not provide the promised healthcare savings to consumers.
According to the FTC's complaint, the companies did not inform consumers that their program was not health insurance until after consumers signed up for the program and paid hundreds of dollars in fees. Consumers who subsequently tried to cancel their enrollment found that the Health Care One companies made it difficult or impossible to obtain refunds.
Shortly after the FTC filed its complaint, the Court issued preliminary injunctions against each of the Health Care One companies to halt their deceptive practices (http://www.ftc.gov/os/caselist/1023071/index.shtm) pending trial.
The settlement orders announced today require the defendants to surrender assets including the proceeds from the sale of an Aston Martin, a Maserati, a yacht, and two motorcycles. 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.
In addition to the companies, the defendants in the case are Michael Jay Ellman; Robert Daniel Freeman; and Bryan Matthew Loving.
NOTE: These stipulated orders are for settlement purposes only and do not constitute an admission by the defendants that the law has been violated. Stipulated orders have the force of law when signed and approved by the District Court judge.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant (https://www.ftccomplaintassistant.gov/) or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics (http://www.ftc.gov/consumer). Like the FTC on Facebook (http://www.ftc.gov/leaving/facebook/index.shtml), follow us on Twitter (), and subscribe to press releases (https://www.ftc.gov/opa/subscribe.shtm#pr) for the latest FTC news and resources.
TNS cp -120615-JF78-3911006 StaffFurigay