Company accused of selling 'sham' health plans ordered to pay customers $100M

A Tampa, Fla.-based company accused of selling "sham" health plans was ordered to repay customers $100 million, the Federal Trade Commission said Aug. 8.

The FTC alleges Benefytt Technologies lied to consumers about insurance plans and used deceptive lead generation websites to lure them in. The company is also accused of illegally charging people "exorbitant junk fees" for add-on products added without consumers' permission.

Benefytt has agreed to the court order but does not admit wrongdoing, according to court records.   

Benefytt sells association memberships and other healthcare-related products, often through a network of telemarketing companies and lead generators, according to the FTC. The company allegedly used a series of deceptive websites like "Obamacareplans.com" that targeted consumers who were searching for health insurance plans under the ACA. Consumers navigating these websites were often led to a sales agent who pitched them Benefytt’s unqualified plans. 

Though consumers were led to believe they were buying comprehensive health insurance, they were charged hundreds of dollars per month for Benefytt's products and services that left them unprotected in a medical catastrophe, the FTC said. The company also allegedly made it difficult for consumers to cancel their plans. 

The company's former CEO, Gavin Southwell, and former vice president of sales, Amy Brady, will be permanently banned from selling or marketing any healthcare-related products, the FTC said. Ms. Brady also will be banned from telemarketing. 

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