FTC Acts on BBB tip shuts down insurance fraud
Published 10:05 am Wednesday, July 27, 2016
Special to The Leader
The Federal Trade Commission, acting on a BBB investigation, has shut down a fraudulent medical insurance scheme and ordered the owner to pay more than $8.7 million in restitution to consumers in 32 states.
The judgment against Partners In Health Care (PIHC) and its principal, Gary L. Kieper, brings to a conclusion a case that began in September 2011, when the Better Business Bureau Serving Wisconsin (BBB) conducted an investigation after receiving complaints from consumers from across the country. The complaints alleged the company mislead consumers who believed they were purchasing medical insurance but had actually been sold a “medical discount card” that was practically worthless.
“BBB regularly conducts investigations and is quick to alert law enforcement agencies when wrongdoing is discovered,” said Jim Temmer, BBB CEO/President. “Filing a complaint does pay off, and we’re elated when our investigations ultimately lead to judgments because justice must be brought to those who defraud consumers. In this case, people in desperate need of health insurance lost money because they were swindled by this firm and its marketers.”
Numerous complaints were received between 2011 and 2014 from consumers in 32 states. Complaints to the BBB included product misrepresentation, delay in receiving refunds, promised and full refunds not received, dissatisfaction with the product, difficulty in reaching the company, product not received in a specific time frame, non-information regarding the cancellation policy, and inability to cancel.
Many complainants were seniors and Spanish-speaking consumers and reported to the BBB that they paid a “one time non-refundable enrollment fee” of $99 and subsequent monthly payments ranging from $119 – $514 per month. In part, complainants state they felt the alleged health insurance plan was misrepresented because what they received was not insurance.
Kieper responded to nearly all complaints filed with the BBB, usually by stating the consumer did not purchase the policy from PIHC, but instead enrolled through an out of state marketing company. Alternatively, he often stated that consumer did not request a refund in the allotted time. Often, Kieper attempted to refer the BBB to the out of state sellers of his program. The BBB concluded that PIHC continually failed to correct or eliminate the underlying cause of complaints.
The BBB referred the case to the FTC in October, 2013. In September 2014, the FTC shut down and sued PIHC and the final judgment against PIHC was granted on June 27, 2016.