All 50 states have been affected by a Tennessee based entity called the American Trade Association (ATA) plus other affiliated firms, which was selling fake health insurance. The program was supposed to work by the ATA taking out money directly from consumer's accounts. Consumer's thought they were saving hundreds of dollars each month on premiums until an issue with their health came up and they found out they were not insured.
Some consumer's have shared their stories through Smart Data Solutions where one person stated, "I tried to get prescriptions through my card and it is not covered. They say they are getting a new plan, but did not inform anyone. Their phone goes unanswered, or it is busy. Their website; http://www.myatabenefits.com doesn't work either. This is either an incredibly poor run organization, or a scam."
After investigations were held consumers found out that their money had actually been used to pay for personal items such as cars, real estate, and loan payments. Some claims were paid, but only the small ones to maintain the appearance of legitimacy.
The state of Maine actually ordered the American Trade Association to pay a $1.2 million penalty because of the unlicensed products sold to consumers, the unlicensed agents, and for not adequately paying for consumer's medical bills.
Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services describes how this is just the beginning. There will be more scammers out there because they know people are seeking cheaper insurance coverage.
Consumers who want to research a company can check with their State Department of Insurance. If you are scammed by insurance company or a company that promises to provide insurance and does not, you have legal rights. In Missouri an insurance company that does not honor its promise can be sued for breach of contract and in some circumstances for bad faith. If a company poses as an insurance company but is a fake, you can sue for damages for breach of contract, misrepresentation and fraud. If you have been scammed you should also report the company responsible to law enforcement.
If you've been the victim of an insurance scam, seek the advice of an experienced attorney to find out your options. The attorneys of Tatlow, Gump, Faiella & Wheelan, LLC have the experience necessary to pursue such insurance companies that are not taking care of their customers. Contact us today for a free consultation.