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From Health Law Daily, November 14, 2014

Phone won’t ring for fraudulent medical alert system telemarketers

By Lisa A. Weder

Several Florida-based phone service and telemarketing companies and their principals entered into a $23 million settlement with the Federal Trade Commission (FTC) and the Office of the Florida Attorney General in a medical alert system scam. The collaborative investigation involved several agencies and organizations, including those from Indiana and Minnesota, as well as the American Diabetes Association. The settlement prohibits the telemarketers from making any future robocalls.

Scam. Since 2012, the telemarketing scam targeted senior citizens by sending them repeated robocalls (autodialing system) that falsely stated that the seniors were eligible to receive a free medical alert system that was bought for them by a friend or family member. An automated, pre-recorded voice was used in the calls instructing seniors to push the number 1, and by so doing would bring them to a telemarketer who stated that the American Heart Association and American Diabetes Association urged senior citizens to have medical alert systems, and that these systems were available for free.

The victims were told that a monitoring fee of $35.00 would be charged after system installation and activation, but the seniors were charged before ever receiving the medical alert systems or before system activation. In total, the senior victims paid $22,989,609.

The seniors were often in poor health, suffered from memory loss or dementia, and rely on family members, friends, or health professionals to manage their finances and/or make health-related decisions for them.

Violations. The complaint carries with it charges that the companies violated the FTC Act, the FTC’s Telemarketing Sales Rule (TSR), and Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA).

Settlement. The settlement order bans the telemarketing companies from making robocalls, prohibits other telemarketing activities, and bars them from making misrepresentations related to the sale of any product or service. The court order judgment will be suspended for all settling defendants once they turn over cash and other assets, some of which include luxury cars and a sailboat, amounting to the $22,989,609 in order to refund the amount paid by the seniors.

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