Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC action halts Medicare scheme targeting seniors, (Oct 2, 2014)

By Linda O’Brien, J.D., LL.M.

A federal district court has halted a telemarketing scheme that tricked senior citizens by pretending to be part of Medicare, and took millions of dollars from consumers’ bank accounts without their consent, the FTC announced today. As part of its ongoing work to protect every community from fraud, the agency seeks to permanently end the operation and return victims’ money.

According to its complaint, filed September 2, 2014 (FTC v. Sun Bright Ventures LLC, Docket No. 8:14-cv-02153, File No. 132-3217), the FTC charged that the defendants called consumers—including many whose numbers were listed on the National Do Not Call Registry—and said they were providing a new Medicare card or information about Medicare benefits.

The FTC complaint alleged that the defendants misrepresented that they were working on behalf of Medicare, and said they needed to verify consumers’ identities using personal information that included their bank account numbers. The defendants allegedly assured consumers that the information would not be used to debit their bank accounts, and that there was no charge for the new Medicare card or information about Medicare benefits.

However, within a few weeks, consumers learned their bank accounts had been debited either $399 or $448 via remotely created checks (RCCs), the complaint alleged. Despite these charges, consumers did not receive any kind of product or service from the defendants. In some instances, the defendants debited the accounts of consumers they had not even contacted.

The FTC charged the defendants with violating the FTC Act and the FTC’s Telemarketing Sales Rule. The defendants are Sun Bright Ventures LLC, Citadel ID Pro LLC, and Benjamin Todd Workman. The FTC named Trident Consulting Partners LLC and Glenn Erickson as relief defendants who profited from the scheme.

The complaint was filed, under seal, in the U.S. District Court for the Middle District of Florida. On September 4, 2014, the court entered a temporary restraining order halting the defendants’ deceptive scheme and freezing the defendants’ and relief defendants’ assets. The defendants and relief defendants agreed to preliminary injunctions, which the court entered on September 18, 2014. The preliminary injunctions continue the conduct prohibitions and asset freezes set forth in the temporary restraining order.

The Commission vote authorizing the staff to file the complaint was 5-0.

Companies: Sun Bright Ventures LLC; Citadel ID ProLLC

News: ConsumerProtection FederalTradeCommissionNews