Monday, April 14, 2008
Attorney General Abbott Takes Action Against Company Marketing Misleading Discount Health Card Plans
Investigators say Austin-based company targeted uninsured pregnant women
AUSTIN – Texas Attorney General Greg Abbott today charged an Austin company with selling fraudulent discount health card plans to pregnant women who lacked maternity insurance.
According to court documents, the defendants, Brian McDonald and Aaron Bouren, and their company, AHCO Direct, LLC, preyed on uninsured pregnant women’s fears about prenatal care and delivery costs by selling them a health discount card that promised to cover up to 60% of maternity-related costs. More than 140 consumers complained to the Office of the Attorney General (OAG) and the Better Business Bureau that the defendants’ “MaternityCard” charged high fees but provided no health care discounts or benefits.
| Media links | |
 Photos of AHCO's Web site |  Photos of AHCO's Web site |
| Texs Attorney General's lawsuit against AHCO | |
“These defendants are charged with organizing a scheme to exploit vulnerable, expectant mothers,” Attorney General Abbott said. “Texas law prohibits vendors from baiting consumers with promises and failing to deliver on their guarantee. Because evidence indicates the defendants failed to provide the services they promised, the Office of the Attorney General took action to enforce the law.”
AHCO’s Web site, www.maternitycard.com, advertised that a large number of health care providers would accept the MaternityCard, which claimed to lower the cost of doctors’ visits, sonograms, prescriptions and other prenatal care. Consumers who visited doctors on AHCO’s preferred provider list, however, discovered that the doctors did not accept the defendants’ discount health care card. When consumers complained to AHCO, the defendants encouraged them to continue paying the monthly membership fee, claiming the real savings would be realized during delivery and later hospital visits.
Consumers also complained that the defendants discouraged uninsured women from contacting the hospital where they intended to deliver prior to their delivery dates, thereby preventing them from receiving any legitimate discounts the hospital may have offered to uninsured patients who pre-pay the delivery costs.
Customers who tried to cancel the plan discovered they faced a $250 cancellation fee unless they agreed to stay on the plan for at least 12 months, even though it provided them no health care assistance.
AHCO’s Web site also advertised a “Certificate of Guarantee,” which promised that consumers would save at least the cost of their yearly membership or AHCO would pay the difference plus $200. The OAG’s investigation found that the guarantee was a compelling factor in customers’ decisions to purchase the card. When the promised savings did not materialize, however, consumers who attempted to collect on the guarantee were denied a refund.
The OAG’s enforcement action charges the defendants with multiple violations of the Texas Deceptive Trade Practices Act, including failing to disclose that the MaternityCard would not significantly discount the cost of maternity care. The OAG is seeking customer refunds and civil penalties of up to $20,000 per violation of the Act.
Consumers who have encountered deceptive marketing practices may file a complaint with the Office of the Attorney General online at www.texasattorneygeneral.gov or by calling (800) 252-8011.
