Some red flags that consumers should look for include plans advertised through blast faxes, spam e-mails, Internet pop-ups or signs posted on telephone poles. In many cases, the company may claim that the consumer can save a considerable amount on health insurance. The company or agent will not give a list of providers until after the consumer purchases the card. The company uses high-pressure marketing tactics and an extreme sense of urgency, telling consumers to "act now" or this is a "one-time offer." Consumers are asked for debit or credit card information or large up-front fees; consumers should seek legitimate discount cards that will not mandate large application fees or up-front costs. Legitimate cards will state on all their marketing materials, "This is not insurance." And legitimate cards will not suggest consumers to drop existing health insurance policies.
DISB Enforcement and Investigation Bureau (EIB) monitors fraudulent activity by insurance companies, securities firms, agents, broker-dealers or individuals determined to cheat the system.
"We know that discount health card companies are actively operating in the District of Columbia and there is a potential for fraudulent activities by unscrupulous individuals promoting these plans," Associate Commissioner for Enforcement and Investigation Stephen Perry added. "If a promoter presents the cards as insurance plans instead of discount plans with the intent of deceiving, he or she may be conducting fraudulent activity. Any suspicious plans should be reported to DISB Enforcement and Investigation Bureau for review."
