NEW YORK: The FTC charged Simple Health with misleading people into thinking they were buying comprehensive health insurance that would cover preexisting medical conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing. However, most enrolled consumers reported paying as much as $500 per month for a medical discount program or minimal benefit program that did not deliver the promised benefits and often left consumers with thousands of dollars in uncovered medical bills.

In a complaint filed in 2018, the FTC said that Florida-based Simple Health misled people into thinking they were buying comprehensive health insurance that would cover preexisting medical conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing. In reality, most consumers who enrolled reported paying as much as $500 per month for what was actually a medical discount program or minimal benefit program that did not deliver the promised benefits and often left consumers with thousands of dollars in uncovered medical bills, or worse yet, unable to get necessary healthcare.

The court found that Dorfman and Simple Health, along with Health Benefits One LLC, Health Center Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC, and Senior Benefits One LLC violated the FTC Act and the agency’s Telemarketing Sales Rule. 

In granting the FTC’s motion for summary judgment, the Federal District Court in the Southern District of Florida found that Simple Health, along with Health Benefits One LLC, Health Center Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC, and Senior Benefits One LLC violated the FTC Act and the agency’s Telemarketing Sales Rule. The court ordered that all of their assets, which have been frozen since November 2018, be liquidated and all the proceeds be turned over to the FTC, which is expected to use the money to refund consumers.

The court also prohibited any misrepresentations in the sale of any good or service and required the defendants to destroy any personal information they collected about their customers. Simple Health’s Chief Compliance Officer Candida Girouard agreed in February 2021 to settle the FTC’s charges and is banned from marketing, promoting, or selling any healthcare-related products, from making misrepresentations in connection with the sale of any good or service, and from violating the FTC’s Telemarketing Sales Rule.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said, “Simple Health preyed on consumers by selling them bogus health care insurance that cost them thousands of dollars for ‘benefits’ that left consumers unprotected. We are pleased the court recognized this blatant bait and switch and ordered the company and its CEO to turn over the money they bilked from consumers.“

The litigation was handled by Elizabeth Scott, Joannie Wei, Purba Mukerjee, and Jim Davis from the FTC’s Midwest Regional office.

The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov.

The post Simple Health Plans LLC And CEO Ordered To Pay $195 Million For Selling Sham Health Insurance appeared first on NRI News.

NEW YORK: Voice over Internet Protocol (VoIP) provider XCast Labs, Inc., agreed to settle Federal Trade Commission charges that it funneled hundreds of millions of illegal robocalls through its network, even after receiving multiple warnings about the unlawful conduct.

Under the proposed court order, XCast Labs will be required to implement a screening process and end its relationships with firms that are not complying with telemarketing-related laws. The Department of Justice litigated the case and filed the proposed order on the FTC’s behalf.

“XCast was warned several times that illegal robocalls were using its services and did nothing,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Companies that turn a blind eye to illegal robocalling should expect to hear from the FTC.”

“Today’s order is another example of the Justice Department’s efforts to protect American consumers from illegal robocalls and to stop telecommunications providers from enabling those calls,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the Federal Trade Commission to enforce the Telemarketing Sales Rule.”

XCast Labs, headquartered in Los Angeles, is a nationwide provider of VoIP technology, providing services that allow its customers to send and receive phone calls, including robocalls, over the internet. Telemarketers who blast illegal robocalls typically use VoIP service providers like XCast Labs to transmit their calls.

According to the May 2023 complaint, the FTC sent letters to several VoIP providers, including XCast Labs, in early 2020 warning them that assisting and facilitating illegal telemarketing or robocalling is against the law. XCast Labs received dozens of “traceback” inquiries from US Telecom’s Industry Traceback Group regarding suspected illegal calls that originated on XCast Labs’ network, as well as inquiries from law enforcement agencies about the transmission of suspected illegal traffic on the XCast Labs network.

Even after receiving these direct warnings, XCast Labs transmitted illegal robocalls to consumers. The FTC also discovered that many of these suspect robocalls were part of organized campaigns to generate telemarketing leads by impersonating officials from the Social Security Administration.

The proposed order, to which XCast Labs has agreed, prohibits the company from violating the Telemarketing Sales Rule in the future. It also bans XCast Labs from assisting and facilitating any high-risk customer, including those that are engaged in initiating, causing, or transmitting telemarketing robocalls or calling numbers on the DNC Registry and any telephone call using Caller ID spoofing to display a phone number that the calling party does not have the legal authority to use.

Next, the order permanently bars XCast Labs from providing VoIP services to any company with which it does not have an automated procedure to block calls that display invalid Caller ID phone numbers or that are not authenticated through the FCC’s STIR/SHAKEN Authentication Framework. Further, the order requires XCast Labs to screen current and prospective VoIP customers to ensure they are not violating telemarking-related laws and terminate relationships with any customer that does not pass the screening process.

Additionally, the order requires XCast Labs to pay a $10 million civil penalty, which will be suspended based on its inability to pay. If the company is later found to have misrepresented its financial condition, the full amount will immediately become due.

The Department of Justice filed the proposed order in the U.S. District Court for the Central District of California.

Thomas Biesty and Frances Kern of the Bureau of Consumer Protection were the primary FTC staff on this matter.

NOTE: Consent order the force of law when approved and signed by the District Court judge.

The post XCast Labs Will Be Banned from Supporting Illegal Telemarketing Practices to Settle FTC Charges It Assisted and Facilitated in Sending Hundreds of Millions of Illegal Robocalls appeared first on NRI News.

NEW YORK: California-based lead generator Response Tree LLC and its president, Derek Thomas Doherty, will be banned from making or assisting anyone else in making robocalls or calls to phone numbers on the FTC’s Do Not Call (DNC) Registry under a proposed order settling Federal Trade Commission charges that they operated more than 50 websites designed to trick consumers into providing their personal information for supposed mortgage refinancing loans and other services.

The defendants allegedly sold the personal information of hundreds of thousands of consumers as leads to telemarketers who used them to make millions of illegal telemarketing calls, including robocalls, to consumers nationwide.

Telemarketing campaigns allegedly assisted and facilitated by the defendants’ illegal lead generation operations were used to sell a multitude of products and services, including solar panels, hearing aids, and extended auto warranties. These campaigns, which made robocalls and calls to numbers on the DNC Registry, were illegal, as the telemarketers did not have consumers’ consent to be called, according to a complaint filed by the Department of Justice on referral from the FTC.

“Response Tree fueled millions of illegal telemarketing calls by tricking consumers into turning over their personal information and selling that information to telemarketers,” said Samuel Levine, Director of the Bureau of Consumer Protection. “The FTC will continue to target every corner of the illegal telemarketing ecosystem to protect consumers and hold wrongdoers accountable.” 

The complaint alleges that the defendants’ websites—including PatriotRefi.com, AbodeDefense.com, and TheRetailRewards.com—were actually “consent farms” that used deceptive and manipulative “dark patterns” to induce consumers to provide their personal information, obscuring hard-to-find and inadequate disclosures about how the information would be used. The defendants claimed that, in providing this information, the consumers consented to receive telemarketing calls. Third parties then bought the defendants’ leads and used the personal information to conduct illegal telemarketing campaigns, according to the complaint.

Through their PatriotRefi.com website, for example, the defendants allegedly duped consumers into providing their personal information under the guise of requesting a quote for a home mortgage refinance loan. After consumers input their personal information and click a button labeled “GET YOUR FAST FREE QUOTE,” the defendants captured the information and stored it in a database to sell to telemarketers and others.

Many or all consumers who provided their personal information to PatriotRefi.com never received home refinance quotes, according to the complaint. Instead, PatriotRefi.com was designed to compile lead lists by harvesting and selling consumers’ personal information without consumers’ informed consent. The complaint further alleges the defendants sold the leads they obtained, knowing that they did not obtain the requisite consent to receive telemarketing calls, including robocalls.

According to the complaint, at their peak, the defendants’ consent farm operations offered an average of 10,000 “real-time” leads for sale every day, and on some days had up to 50,000 illegally farmed leads for sale. In all, between 2019 and 2022, Response Tree and Doherty sold millions of deceptively collected leads.

The proposed order settling the complaint, which must be approved by the court before it can go into effect, bans the defendants from initiating or helping anyone else initiate telemarketing robocalls. It also bans them from calling, or assisting anyone else in calling, phone numbers on the DNC Registry and from selling, transferring, or disclosing consumer information in connection with lead generation activities.

The order also imposes a $7 million judgment against the defendants, which will be suspended based on their inability to pay. If they are later found to have misrepresented their financial condition, however, the full amount will immediately become due.

The Commission vote approving the complaint and stipulated final order and referring it to the U.S. Department of Justice (DOJ) for filing was 3-0. The DOJ filed the complaint and proposed a final order in the U.S. District Court for the District of Central District of California.

The staff attorneys on this matter are Karina A. Layugan, Matthew H. Fine, and Jeffrey Tang of the FTC’s Western Region Los Angeles office.

The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov.

The post California-based Lead Generator Agrees to Settlement Banning It from Making or Assisting Others in Making Telemarketing or Robocalls appeared first on NRI News.

UNITED STATES: The Federal Trade Commission (FTC) has renewed its memorandum of understanding (MOU) with the Federal Communications Commission (FCC) to combat unsolicited communications, including email and text spam, scams, and illegal telemarketing. The MOU aims to promote cross-border collaboration between public authorities who are members of the Unsolicited Communications Enforcement Network (UCENet).

The FTC and FCC have signed the MOU to fight robocalls and other unsolicited communications that try to prey on consumers. The MOU is a non-binding instrument that facilitates information sharing, capacity building, and enforcement assistance among the partners. The MOU has been renewed and made evergreen, given the success of the collaboration under the original document.

“The FTC is committed to using all of its tools to fight robocalls and other unsolicited communications that try to prey on consumers,” said FTC Chair Lina M. Khan. “This scourge does not respect borders, and our recommitment to this MOU underscores the importance of international communication and cooperation to combat this problem.”

The UCENet MOU is part of the FTC’s continuing work to fight harms that can arise from unwanted messages. Unsolicited communications in the form of illegal and spoofed robocalls, text messages, and emails are often the source of scams that harm millions of consumers in the United States each year. The revised MOU has also been signed by UCENet partners in Canada, Australia, South Korea, New Zealand, and the United Kingdom.

The FTC’s work in this area includes its recent Operation Stop Scam Calls initiative, which united federal and state law enforcement partners from across the United States in their fight against illegal telemarketing operations and the companies that facilitate their scams via lead generation and telecommunications services. The effort also targeted Voice over Internet Protocol (VoIP) service providers who facilitate illegal robocalls every year, which often originate overseas.

The collaboration, information-sharing, and intelligence-sharing by UCENet MOU signatories serve to strengthen, enhance, and complement the work of the FTC and other domestic agencies fighting the scourge of unwanted and illegal telemarketing calls. The lead staffer on this matter was Kristina Mulligan in the Commission’s Office of International Affairs.

The FTC works with counterpart agencies to promote sound antitrust, consumer protection, and data privacy enforcement and policy. The renewed MOU between the FTC and FCC is a significant step towards combating unsolicited communications and protecting consumers from scams and illegal telemarketing.

The post FTC and FCC Renew MOU to Combat Spam, Scams, and Illegal Telemarketing appeared first on NRI News.