The Federal Trade Commission has filed suit to intervene in a scheme in which it says fraudulent telemarketers targeted individuals seeking insurance coverage.
Per the complaint (PDF), which was filed earlier this month, the FTC alleges that participants in the scheme—who operated under names like American Collective and Innovative Partners—would contact consumers and tell them that they must pay to renew or maintain their health plans.
The agency said that targeted consumers paid millions in “premiums” for health coverage that they didn’t actually need or want, while failing to provide coverage that could address their medical costs.
The complaint alleges that the fraudulent behavior dates back to at least early 2023. In the calls to consumers, the alleged fraudsters would often say that they are selling “state-issued” PPO plans that do not carry a deductible or coinsurance, offering comprehensive coverage with low or no copayments.
If the participants encountered people who were already covered, they would tell consumers that they represent real health insurers or government agencies, and that if they did not pay up, their insurance would be canceled, the FTC said.
The products sold within the scheme did not constitute comprehensive health coverage, but instead comprised various medical discounts, ancillary products and payment caps for certain services, such as emergency care. In many cases, hospital services were fully excluded, according to the agency.
When consumers sought medical services, they discovered how skimpy the coverage is, per the announcement.
The complaint also alleges that the scheme participants would charge consumers without their full and informed consent.
The FTC said that the case follows the launch of its Healthcare Task Force last month. The commissioners voted 2-0 to direct staff to file the complaint.
“Targeting unlawful conduct that drives up Americans’ costs, especially healthcare costs, is one of my top priorities,” said Chairman Andrew Ferguson in a press release.
“The Commission’s work here is essential: When companies engage in practices that inflate prices, limit patient access to medical care, or undermine the integrity of the healthcare system, consumers suffer,” Ferguson said.