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Medical-alert pitch bad for seniors’ financial health

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The best things in life may be free, according to that old proverb, but that doesn’t extend to medical-alert devices – no matter what the person on the other end of the line tells you.

Still, that’s become a lucrative sales pitch for scam artists, who over the years have bilked senior citizens out of millions of dollars with this scheme.

So reports that the Federal Trade Commission is cracking down on one such operation is certainly good news for consumers everywhere.

Earlier this month, the FTC filed a complaint in a Florida federal court against an Orlando-based operation suspected of racking up more than $13 million in commissions with these bogus calls since March 2012.

The U.S. District Court for the Middle District of Florida issued a temporary restraining order the next day, putting a quick stop to the practice and freezing the assets of the 13 defendants cited in the complaint brought by the FTC and the Office of the Florida Attorney General.

“These telemarketers used illegal robocalls to make a sales pitch that was 100 percent false,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a statement announcing the court’s action. “They lied about the product, about whether health organizations had endorsed it, and about its cost. And all the while, their M.O. was to take advantage of older people’s concerns about their health.”

Now, the two agencies are seeking a court order to shut down the operation for good.

So how does this scam work?

While details vary from hoax to hoax, the accusations contained in the Florida complaint are consistent with reports of similar operations around the country. To wit:

  • A senior citizen receives a recorded phone call claiming a friend or family member has purchased a medical alert device on his or her behalf. These devices, typically worn around the wrist or neck, come with a button that can be pressed in an emergency to connect with a private monitoring center.
  • When prompted to choose “1″ for more information, the individual is transferred to a real person who falsely states the device is recommended by the American Heart Association, American Diabetes Association and the National Institute on Aging.
  • Lastly, the recipient of the call is assured he or she won’t be charged the monthly fee for monitoring the system until the device has been delivered, installed and activated. In practice, the initial monitoring fee is billed to the individual’s credit card immediately, which typically comes to between $30 and $40 a month.

All told, the FTC said it had received 67,000 complaints about this particular operation.

In New Mexico, reports of this popular scam have quieted down since last summer when it was “very active,” according to Connie Quillen, executive assistant of the Albuquerque-based Better Business Bureau Serving New Mexico and Southwest Colorado.

But that’s not much consolation for Michael of Ranchos de Taos, who contacted me a few weeks ago to report he had been getting three or four calls a week from a persistent robocaller for the past several months.

The caller identified himself as “John from the shipping department,” who claimed that he had been trying to get in touch with him to set up delivery of “the unit you ordered.”

When Michael tried calling the number mentioned in the message to confirm it was a scam, he said, a recording informed him the number was not service.

“This scam was simple but very easy to fall into,” he wrote in an email to the Journal. “It was aimed at people who very well might benefit from the unit/service they were selling and might not have the clearest of memories. It is also successful because one or the other of the partners in a marriage might not be readily available, so the one who takes the call very well could assume the other made the order.”

For its part, the AARP issued a “scam alert” to its members last summer, warning them to resist these phony “free” offers. Among its recommendations for these and similar scams that prey on the elderly:

  • Hang up on unsolicited offers: Even asking for general sales information can come back to haunt you later in additional calls.
  • Don’t believe claims the devices are free: While the caller may state otherwise, chances are that Medicare, Medicaid and most private insurers won’t cover the cost of the equipment. And if by some chance they do, you will need a recommendation from your doctor.
  • Resist the temptation to “opt out” of future calls: While that might seem like the logical thing to do, all it really does is confirm for the caller that yours is a working number.
  • No order, no pay: Regardless what the person on the other end of the line might tell you, if you didn’t order it, don’t agree to pay for it.

Nick Pappas is assistant business editor at the Albuquerque Journal and writes a blog called “Scammed, Etc.” Contact him at npappas@abqjournal.com or 505-823-3847 if you are aware of what sounds like a scam. To report a scam to law enforcement, contact the New Mexico Consumer Protection Division toll-free at 1-800-678-1508.

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