The Federal Trade Commission reached a deal with a group of defendants accused of scamming elderly consumers by promising to provide new Medicare cards.
Florida-based Sun Bright Ventures and individual defendants Benjamin Todd Workman and Glenn Erikson were the subject of a lawsuit last October alleging violations of Section 5 of the Federal Trade Commission Act and the Telemarketing Sales Rule.
According to the FTC, the defendants called senior citizens—many of whom had listed their numbers on the federal Do Not Call Registry—and requested bank account and debit account numbers in order to send them new Medicare cards. The information was necessary to verify the consumers' identities and no money would be withdrawn from the accounts, the defendants assured the consumers.
Instead, the agency said the defendants debited either $399 or $448 using remotely created checks, and provided nothing in return. In some cases, the defendants also falsely promised to provide identity theft protection services for the consumers.
The settlement agreement prohibits the defendants from selling healthcare-related products or services, or billing or charging consumers without consent, or from violating the Telemarketing Sales Rule. They are also banned from selling identity theft protection-related products, creating or depositing remotely created checks or payment orders, and from misrepresenting material facts about any product or service.
A $1.4 million judgment will be suspended upon payment of $35,000 by Workman and the surrender of certain bank accounts.
To read the complaint and the stipulated order in FTC v. Sun Bright Ventures, click here.
Why it matters: The enforcement action highlights several areas of concern for the FTC: the targeting of elderly consumers with deceptive claims about healthcare-related products, the increasing violations of the Do Not Call Registry, and the re-occurring use of remotely created checks.