Antitrust Law Daily Wrap Up, ADVERTISING NEWS: FTC action halts medical discount card scheme, (Jul 21, 2016)
Organizations Mentioned:Partners In Health Care Association, Inc.
By Linda O’Brien, J.D., LL.M.
The operator of a health care scam and his company that tricked consumers seeking health insurance into buying phony medical discount cards were banned from selling healthcare-related products and from telemarketing, under court orders obtained in an action by the FTC, the agency announced today (FTC v. Partners In Health Care Association, Inc., File No. 132-3122).
In August 2014, the FTC filed a complaint in the federal district court in the Southern District of Florida against Gary L. Kieper and his company Partners In Health Care Association, Inc. (PIHC), alleging that the defendants engaged in a bait-and-switch marketing scheme that sold medical discount cards to consumers under the pretense that they were selling health insurance. The medical discount cards were marketed via telemarketing, Spanish language radio advertisements, television advertisements, and the Internet.
The scam targeted people who needed health insurance, were paying high premiums for coverage because they had lost their jobs, or had pre-existing medical conditions. The discount card marketers claimed the "insurance" would pay for doctor and emergency room visits and other services, and at times claimed the "insurance" qualified for "Obamacare." Instead, PIHC delivered customers a medical discount card that left them uninsured, even though they had paid a fixed enrollment fee and monthly "premiums" ranging from $99 to several hundred dollars.
The court’s summary judgment order on May 31 found that Kieper controlled the operation, was aware of the false representations, and assisted and facilitated his telemarketers’ violations. The court also entered a default judgment against PIHC. The final order against Kieper and PIHC prohibits them from selling healthcare products and telemarketing, misrepresenting any good or service, and selling or otherwise benefitting from consumers’ personal information. It imposes a monetary judgment of $8,746,094 against defendants. A permanent injunction against both defendants was entered on June 27.
Companies: Partners In Health Care Association, Inc.
News: Advertising ConsumerProtection FederalTradeCommissionNews