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Medical alert scam shut down

By Paul Muschick, The Morning Call (Allentown, Pa.) on

Published in Senior Living Features

Most people who got those annoying robocalls offering them free medical alerts knew the devices weren't really free. We now know how much they cost..

Authorities announced a settlement earlier this month with nine companies and four individuals they allege were behind the deceptive calls. The settlement imposed a judgment of about $23 million, the total amount people nationwide paid to have their "free" alert systems monitored.

Of all the scams I've written about, this was among the most bothersome, based on the volume of complaints I received and the outrage about the nature of the calls, which frightened some senior citizens.

I heard from a few hundred people locally. About 67,000 people nationwide had complained as of early this year, the Federal Trade Commission said. The Better Business Bureau ranked the complaint its top scam last year.

The misleading calls offered people free medical-alert systems and then charged them monthly monitoring fees of $34.95, authorities said. The callers preyed on seniors' fears of being alone and not being able to get help in an emergency.

"Many of the consumers who received the defendants' calls were elderly, live alone and have limited or fixed incomes," the FTC and Florida attorney general's office said Thursday in announcing the settlement.

Authorities have not yet determined whether the money collected under the settlement will be used to pay restitution to people who may have been deceived into paying monitoring fees. While the judgment amount is significant, the reality is there won't be anywhere near that much available to possibly refund.

As often occurs in cases like this, the defendants don't have the ability to repay all of the money that the court ordered, the FTC said.

Several versions of the call hit the Lehigh Valley. The first wave in spring 2013 told people they could receive an alarm at "no cost to you whatsoever" after someone recommended it for them or bought it for them.

"It's the 'fallen-and-I-can't-get-up' type of system you've seen on TV," a recorded voice told a North Whitehall Township man. "Looks like you are getting the system because either yourself, a friend, a family member or maybe even someone you know has experienced a fall in the past."

By late summer 2013, the calls were offering free groceries in addition to free medical alarms.

"If you or a family member are 60 years old or older, you now qualify under the new National Senior Assistance Program to receive $3,000 in free grocery savings certificates," said one of the calls received by a woman in Bethlehem, Pennsylvania. "They can be used at over a hundred major grocery chains across the U.S."

In January, the FTC and the Florida attorney general's office sued the companies and individuals they alleged were working together to make the calls from Orlando.

People who followed the automated prompts to speak to an operator weren't told about the alarm monitoring charge until the end of the conversation, the lawsuit alleged, and then falsely were told they wouldn't be charged until they received and activated the alarms.

Authorities said the callers refused to identify their company name or address and hid their phone numbers on caller-identification systems by "spoofing" fake numbers. They refused to tell people who supposedly signed them up for the systems, lied about the systems being endorsed by organizations such as the American Heart Association and pressured hesitant seniors into signing up, according to court records.

 

The FTC noted that some people who agreed to the fees got the promised system.

"While the product seems to work, and the pricing is competitive with similar products, many consumers who were misled into agreeing to receive the product simply do not want or need it," authorities said in court records.

An Allentown, Pennsylvania, woman told me she was sent an alert system after getting one of the calls, but she never got her free groceries. The FTC isn't aware of anyone who did.

A federal judge in Florida approved a settlement Nov. 13 with Worldwide Info Services, Elite Information Solutions, Absolute Solutions Group, Global Interactive Technologies, Global Service Providers, Arcagen, American Innovative Concepts, Unique Information Services, National Life Network, Michael Hilgar, Gary Martin, Joseph Settecase and Yuluisa Nieves.

In the settlement, they did not admit nor deny the allegations against them.

Several of the defendants had filed court papers denying they violated consumer protection or telemarketing laws and were in receipt of "ill-gotten monies." They denied committing deceptive or unfair acts and argued that any alleged misrepresentations were "not likely to mislead customers acting reasonably under the circumstances."

The settlement bans the companies and individuals from making robocalls and doing telemarketing; prohibits them from promoting or selling medical alert products or services; and bars them from making misrepresentations related to the sale of any product or service.

Most of the nearly $23 million judgment will be suspended after the defendants collectively turn over about $79,000, which includes cash and the sale of assets including luxury vehicles and a boat.

People who believe they were defrauded should file a complaint with the FTC so their information is on file in case restitution is paid. You can file a complaint at http://www.ftc.gov or 877-382-4357.

Paul Muschick of The Morning Call (Allentown, Pa.) helps consumers fight errors, incompetence and arrogance by businesses, governments and institutions.

(c)2014 The Morning Call (Allentown, Pa.)

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