Scams target scams

Deseret News
10-27-02 

    The ink had barely dried on Kansas' new legislation that set up a free "do not call" list — which lets consumers sign up at no charge to block telemarketing calls — when the state attorney general's office received a report that a telemarketer was offering a service to verify placement on the list — for a fee of $399.

      Similar calls have been reported in Colorado and New York, which, like Kansas, have no-call registries that consumers can join free. In Colorado, companies using such names as Fraud Stoppers and the National Association Against Fraud have tried to finagle credit card and bank-account information from consumers to "verify" their registration on a no-call list. The Federal Trade Commission warns that some of these identity thieves are even posing as FTC and other federal officials and may try to get your Social Security number.

      That isn't the only type of scam that's surfaced recently. The trial date is closing in fast for Geoffrey Cole and Vivian Lehman, who were arrested last year on felony charges for allegedly running an unlicensed health-insurance company out of Miami. When "Well America Group" folded, state officials say it left $3.7 million in unpaid medical claims.

      The allegations against Well America are similar to a wave of phony health plans that hit a decade ago. Using Internet pitches, bogus insurance companies advertise coverage for as little as half the going rate, with no exclusions for pre-existing conditions.

      For a few months, they may actually pay claims as they sign up more customers.

      "Premiums for legitimate coverage are so high that victims will grasp at the cheapest deal they can find without asking a lot of sensible questions," says James Quiggle of the Coalition Against Insurance Fraud.

      Often, the insurance company appears to be affiliated with an official-sounding trade association — such as the "National Association of Working Americans" — that is an empty shell, says Quiggle. To be safe, make sure a company is licensed to do business in your state. Insurance-division Web sites in Colorado and Florida, for instance, have search engines for just that purpose. For links to those sites and to their lists of known phony insurance operators, go to www.kiplinger.com.