Madigan files suit against direct mail solicitor

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CHICAGO—Attorney General Lisa Madigan has announced that a lawsuit has been filed in Sangamon County Circuit Court against a Pennsylvania company that allegedly used direct mail solicitations to create confusion about the federal government’s approved Medicare discount prescription drug cards to lure Illinois consumers into purchasing its unapproved cards.

In a lawsuit filed Nov. 2, Peoples Benefit Services, Inc., is charged with violations of the Illinois Consumer Fraud and Deceptive Business Practices Act for falsely marketing its discount prescription drug card program. The attorneys general of Arkansas, Massachusetts and Pennsylvania filed similar lawsuits in their states.

“Peoples Benefit’s direct mail solicitations deceived consumers by falsely implying that the federal government endorsed or sponsored their program,” Madigan said. “This business took advantage of the confusion created during the first stages of the Medicare card sign-up and, in doing so, victimized elderly and low-income Illinoisans.”

Madigan’s office received three complaints from consumers in Coles, Douglas and Livingston counties, including one complaint from the outreach coordinator of a Douglas County senior center who received several calls from confused seniors questioning the validity of the solicitation and Peoples Benefit’s connection to the federal government.

Madigan’s lawsuit alleges Peoples Benefit’s direct mail solicitations confused Illinois consumers by using official-sounding names, such as “Senior Security Supplement Initiative” and “Senior Security Prescription Plan,” and logos similar to the logo used by the federal government’s Social Security Administration. The company’s January 2003 promotional campaign coincided with the passage of the federal Medicare Prescription Drug Improvement and Modernization Act of 2003, Madigan’s lawsuit alleged. Peoples Benefit’s discount prescription drug card was not, in fact, a Medicare-approved card.

In addition, the direct mailings allegedly falsely offered higher savings than were available and falsely represented that it was selling an insurance product, which the discount cards are not. The mailings also allegedly used words and phrases to falsely imply that consumers needed to act fast because this was a limited time offer, Madigan’s lawsuit alleges.

Madigan’s lawsuit asks the court to prohibit the defendants from deceptively advertising, promoting and selling discount prescription drug cards, and from further violating Illinois’ consumer protection laws. The lawsuit also seeks a civil penalty of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud. Additionally, the suit seeks $10,000 per violation committed against a person 65 or older. Finally, Madigan’s lawsuit asks the court to order the defendants to pay restitution to consumers.

Assistant Attorney General Cassandra Karimi is handling the case for Madigan’s Consumer Protection Division.

Madigan’s office urged seniors to be on alert for Medicare fraud as the program moves forward. Her office also has partnered with the Suburban Area Agency on Aging in Oak Park to expand statewide the Senior Medicare Patrol Program, which trains senior volunteers to spot and report Medicare fraud. Questions about the new drug benefit or suspicions of fraud can be directed to the Suburban Area Agency on Aging at 1-800-699-9043.

From the Nov. 23-29, 2005, issue

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