Federal Case Filed Against U.S. and Canadian Based Companies for Medical Discount Scams Targeting Seniors

A Federal Trade Commission (FTC) lawsuit has been filed in the U.S. District Court for the Northern District of Illinois in Chicago naming several United States and Canadian companies as defendants. The allegations in the complaint allege that these companies acted on a medical discount scam that targeted seniors.

According to the FTC’s lawsuit, seniors in the United States were victims of deceptive telemarketing telephone calls that proposed phony discounts on prescription drugs. Some of the calls even pretended to be associated with Social Security, Medicare or a medical insurance company.

According to the FTC, the telemarketing phone calls pitched a prescription drug discount card that would supposedly provide big discounts or even free subscription drugs for seniors. Many of the victims believed they needed to purchase this card in order to continue to receive Social Security benefits, Medicare or other medical insurance. The sale of the discount card was a part of the scam. Discount cards that these companies were selling to seniors were actually free by simply calling a toll-free telephone number or visiting a website.

More important, the discount cards did not provide any discounts to consumers who already had either governmental or private insurance. In other words, the old saying that you get what you pay for held true. The discount cards were worthless.

The FTC alleged that the telemarketers convinced their victims to give them bank account numbers in order to purchase the discount cards. That information was then used to debit the bank accounts of the seniors who chose to buy into the program.

The company then used the victim’s bank account information to take approximately $300 from each bank account. Many of the consumers who actually did pay for these discount cards never received anything.

The FTC is involved now in shutting down the medical discount schemes. Some of the companies responsible for this scheme include, but are not limited to, AFD Advisors LLC; AMG Associates LLC; CAL Consulting LLC and Park 295 Corp.; Canadian companies are involved as well.

The companies and some of their officers have been charged with violating Section 5 of the FTC Act by deceptively presenting themselves as government or insurance representatives. In addition, these same companies and some of the officers have been charged with violating the FTC’s telemarketing sales rule for making these deceptive and unlawful deals with seniors. The federal district court in Chicago has issued a temporary restraining order stopping these companies from continuing this scam. The court has also frozen their assets.

Hopefully the government will continue to keep a watchful eye on deceptive practices against unwary seniors and others — particularly those who are vulnerable to scams dealing with healthcare and other issues of personal security.

Kreisman Law Offices has been successfully handling litigation matters for individuals, families and businesses for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Morton Grove, Chicago Heights, Niles, Des Plaines, Rosemont, Rolling Meadows, Orland Park, Arlington Heights, Glendale Heights, Prospect Heights, Chicago Heights, Blue Island, Chicago (Lincoln Park, Lincoln Square, Wicker Park, Hegewisch) and Western Springs, Ill.