Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC targets alleged deceptive discount drug telemarketing operation, (Sep 17, 2013)

By Tobias J. Gillett, J.D., LL.M.

The FTC has filed a complaint in the federal district court in Chicago charging a U.S. and Canadian telemarketing operation with making false offers of discounts on prescription drugs to seniors while claiming to be affiliated with Medicare, Social Security, or health insurance providers (FTC v. AFD Advisors, LLC, FTC File Nos. 1323138 and X130058, Case No. 13-CV-6420).

According to the FTC’s complaint, AFD Advisors, LLC, doing business as AFD Medical Advisors; AMG Associates, LLC, doing business as AMG Medical and AMG Medical Associates; Park 295 Corp.; CAL Consulting, LLC, doing business as Clinacall; 9262-2182 Quebec Inc.; 9210-7838 Quebec Inc.; and four individual defendants operated their scheme from locations in both the United States and Canada. Telemarketers working for the operation would allegedly call consumers from a telemarketing boiler room in Montreal, and falsely claim or imply that they worked for or were affiliated with Medicare, Social Security, or the consumers’ health insurance providers.

The telemarketers would allegedly then offer the consumers a prescription drug discount card that would purportedly provide them with substantial savings on their prescription drug costs. They would also sometimes claim signing up for the card was required for consumers to retain their benefits under Medicare, Social Security, or a private health insurance plan. The telemarketers would request the consumers’ bank account information, purportedly for verification purposes, but would then use demand drafts, also known as remotely created checks, to debit the accounts for approximately $300. According to the FTC, the discount cards were the same as those offered free of charge on certain websites, and typically did not provide benefits to consumers that already had coverage through Medicare, Social Security, or private health insurance.

“This scam, which targeted and deceived our nation’s seniors, is as cynical and wanton as they come,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We look forward to bringing this operation to a halt and working to get relief for the victims.”

The complaint charges the operation with violating the FTC Act and the FTC’s Telemarketing Sales Rule (TSR) through their deceptive conduct, and with violating the TSR by calling consumers on the Do Not Call Registry. The federal district court in Chicago has issued a temporary restraining order halting the defendants’ business activities and freezing their assets, among other provisions.

Companies: AFD Advisors, LLC; AMG Associates, LLC; Park 295 Corp.; CAL Consulting, LLC; 9262-2182 Quebec Inc.; 9210-7838 Quebec Inc.;

News: ConsumerProtection FederalTradeCommissionNews