Texas Corrects Practices Of Health Discount Card Companies
International Association of Benefits must disclose its services are not insurance
DALLAS - Texas Attorney General Greg Abbott today obtained a
court order correcting the fraudulent business practices of
International Association of Benefits (IAB) of Richardson, which
falsely promised consumers that its health care “discount cards” could
reap significant savings.
The agreed final judgment includes a
permanent injunction that requires IAB to disclose to prospective
members that its health plans are not insurance, nor is the company
licensed to offer insurance. In addition, the order prohibits the
company from claiming its plans offer a range of discounts linked to
health care access, specific provider networks and pharmacies unless
those claims have a verifiable and factual basis.
“Texans
deserve to have access to quality health care coverage works for them,
not duped into paying lots of money for false, empty promises,” said
Attorney General Abbott. “This company marketed itself as a cure-all
for consumers whose hopes of finding health care coverage had faded,
and, as that old saying tells us, if it sounds too good to be true, it
probably is.”
The Attorney General’s investigation leading to
the original lawsuit filed in April 2005 found that IAB made unfounded
claims that its plans were recognized by numerous hospitals, clinics,
physicians and pharmacies. When consumers attempted to use the
“discount cards” they were told the cards were invalid, but only after
they had paid up-front enrollment fees to become members and had
authorized IAB to make monthly withdrawals from their checking accounts.
Under
the terms of today’s order, IAB may only assess plan “enrollment fees”
if they are of a nominal amount that reflect the actual cost of
enrolling clients, and the company clearly explains the purpose of the
fees and the terms of any refund policy. If IAB advertises “money back”
guarantees, it must makes full refunds to consumers requesting them,
including enrollment fees and monthly recurring fees. The Attorney
General filed his original lawsuit, in part, based on complaints that
IAB repeatedly failed to honor these claims, a violation of the Texas
Deceptive Trade Practices Act.
IAB also agreed to pay civil
penalties and state attorneys’ fees of $150,000 and will make refunds
to current or former clients who file complaints with the Attorney
General or the Better Business Bureau about the company’s practices.
Texas
consumers who wish to file complaints against this company or others
misleading the public may contact the Attorney General toll-free at
(800) 252-8011 or file a complaint online at www.oag.state.tx.us
