Massachusetts is the latest state to take action against a pair of New Jersey companies and three of its employees, alleging that they used unsolicited faxes, or so called “junk faxes,” to sell a fraudulent health insurance product to hundreds of Bay State residents.
In a civil complaint, Massachusetts Attorney General Martha Coakley alleges that National Alliance of Associations and Professional Benefit Consultants, both of Turnersville, N.J., along with Thomas Sullivan, James Doyle and Christopher Ashiotes, sent unsolicited facsimiles to Massachusetts businesses and individuals promising discounted quality health care.
In January 2008, the Massachusetts Division of Insurance issued a cease-and-desist order to National Alliance, for allegedly engaging in the unauthorized business of insurance and ordering it to stop advertising its products. States including Kansas and Florida have taken similar steps against the company.
As more small-business owners seek ways to cut costs to remain in business, regulators and industry experts fear that more of them will consider seriously or even choose to enroll in plans being offered by fax at deep discounts. In many cases, the coverage appears to be similar to their current health plan coverage, but in fact is far inferior, industry experts say.
The Massachusetts complaint states the defendants deceived customers into believing they were buying health insurance but the actual product was association memberships that provided a limited plan for discounts on certain medical services, according to Coakley’s office.
“Our office has made a priority of protecting consumers against unfair and deceptive trade practices by companies seeking to exploit anxiety and confusion about the individual health insurance mandate,” Coakley said in statement. “Selling a product that purports to be one thing, but is something else entirely, is an illegal sales practice and will not be tolerated.”
Coakley’s office cited advertising that stated “low cost quality health care” for individuals and families and “top rated insurance” as means to convince customers that they were offering health insurance when National Alliance was not licensed to provide health insurance in Massachusetts.
The complaint also alleges that the defendants deceptively implied that their products satisfied state requirements that individuals who can afford to do so must purchase health insurance coverage or face tax consequences. Through an “800″ phone number offered on the advertising, consumers received false and misleading statements believing the product being offered was comprehensive health insurance, the complaint states.
Consumers were charged a non-refundable $125 enrollment fee plus membership fees based on the type of membership they purchased. The complaint seeks penalties, restitution for consumers and a court order permanently prohibiting all the defendants from engaging in deceptive and illegal practices in Massachusetts.
Massachusetts, other states act against alleged ‘junk fax’ distributors via IFAwebnews.com .
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