By Nathalie Voit
The Federal Trade Commission (FTC) is pressing charges against sham healthcare company Benefytt Technologies, according to a press release issued by the agency on Aug. 8.
The complaint, Federal Trade Commission v. Benefytt Technologies, Inc, filed in a Florida federal court on Monday, alleges that Benefytt and two of its subsidiaries: Health Plan Intermediaries Holdings, LLC and HealthPocket Inc., knowingly deceived consumers into purchasing sham health insurance plans and then made it hard for them to cancel.
Additionally, the lawsuit claims that the defendants regularly bundled and charged junk fees for multiple unwanted products without consumers’ consent. Then, when consumers terminated their core healthcare plans, Benefytt continued to charge them for these illegal add-ons.
Former CEO of Benefytt Technologies Gavin Southwell and former Vice President of Sales at Benefytt Amy Brady were named in the complaint.
Per a proposed court order, the Tampa-based healthcare firm will be required to pay $100 million to the FTC for consumer redress. Benefytt is also prohibited from engaging in deceptive sales practices or charging illegal junk fees. The company must further allow existing customers to cancel their enrollment and inform them about the FTC’s complaint. Additionally, Benefytt must closely monitor its subsidiaries to ensure they adhere to the agency’s consumer protection guidelines.
The order also permanently bans Southwell and Brady from playing any role in the future sale or marketing of any healthcare-related product or service. Brady would be permanently barred from telemarketing, Monday’s notice states.
“Benefytt pocketed millions selling sham insurance to seniors and other consumers looking for health coverage,” Director of the FTC’s Bureau of Consumer Protection Samuel Levine said. “The company is being ordered to pay $100 million, and we’re holding its executives accountable for this fraud.”
