Gov't shutters medical-alert scam aimed at seniorsBy MATTHEW PERRONE , Associated Press
Jan. 13, 2014 3:02 PM ET
WASHINGTON (AP) — Federal and state regulators have shut down a multimillion-dollar scam that they said duped seniors into turning over their credit card information in exchange for purportedly free medical-alert devices.
The business blasted seniors across the U.S. and Canada with robocalls claiming that they were eligible to receive a free alert system purchased by a friend or relative. Once the person agreed to receive the device, they were transferred to an operator who took their billing information and immediately began charging them for the service.
Government officials said Monday that they received more than 66,000 complaints about the scam, which deliberately targeted the elderly.
"You call enough older consumers and you will find someone with dementia or Alzheimer's," said the Federal Trade Commission regional director Steven Baker in a press conference. "These people knew they were dealing with people who weren't all there and they took their money."
Medical alert systems are designed to help seniors get quick assistance in the event of an emergency. The devices usually consist of a necklace or wristband with an emergency button that contacts a company dispatcher.
The scam was not connected with any actual manufacturers of medical alert devices. The makers of Life Alert had sued the business for using its "Help, I've fallen and I can't get up," phrase on the robocalls.
FTC officials said the business collected more than $13 million in commissions for selling the devices over two years, though it's unclear how much consumers actually lost. Many victims never actually received the equipment. The business' assets have been turned over to a receivership under a court-authorized restraining order, with the aim of returning as much money to consumers as possible, officials said.
Operating under more than a dozen corporate names, including Worldwide Info Services and The Credit Voice Inc., the business employed more than 100 people and maintained half-a-dozen addresses across Florida. Prosecutors said the business appeared organized specifically to evade law enforcement.
A joint complaint filed by the state of Florida and the federal government charges the business and its owners with violating laws governing telemarketing and misrepresenting facts, including falsely telling consumers that someone had purchased the medical system for them. The scam also falsely claimed that the medical alert devices were endorsed by medical groups, including the American Heart Association and the National Institute on Aging. The complaint names the defendants as Michael Hilgar, Gary Martin and Joseph Settecase.
Calls placed to several offices affiliated with the business were not returned Monday.
A court hearing is scheduled for Thursday. Agency officials said they will seek a court order banning the defendants from engaging in further fraudulent activity.