In a recent significant enforcement move, the Federal Trade Commission (FTC) has reached settlements totaling $145 million with two major players in the lead generation and health insurance marketing space: Assurance IQ, LLC and MediaAlpha, Inc. These actions underscore the FTC’s sharpened focus on deceptive marketing practices—particularly in the health insurance sector, where consumer vulnerability is high.
Unpacking the FTC’s Allegations
Seattle-based Assurance IQ allegedly used telemarketing to deceptively push short-term medical and limited benefit indemnity plans bundled with supplemental products such as dental and vision discount plans, telemedicine plans, and prescription discount plans. According to the FTC, Assurance’s telemarketers misrepresented key aspects of these plans, including purported:
- Coverage for preexisting conditions
- Absence of benefit caps
- Access to provider networks that could lower their costs
- Inclusion of supplemental products at no extra cost
The FTC also alleged that Assurance charged consumers without obtaining their express informed consent in violation of the FTC Act and the Telemarketing Sales Rule (TSR). The resulting $100 million judgment will be used to refund affected consumers. The settlement also imposes strict prohibitions on future misrepresentations and mandates substantiation of all health plan claims as well as the disclosure of true plan costs and any limitations on their use and benefits.
MediaAlpha, based in Los Angeles, allegedly used misleading lead generation websites and advertisements to collect information from consumers looking to purchase insurance. The FTC complained the company operated domains like “ObamacarePlans.com” to falsely imply a government affiliation and promoted a fictitious “Health Insurance Give Back Program” using actors and a paid doctor to lend credibility. This data was then sold to telemarketers who bombarded consumers, including ones on the national Do Not Call Registry, with robocalls and deceptive sales pitches for healthcare plans offered by MediaAlpha’s partners.
The FTC’s $45 million proposed judgment against MediaAlpha includes a ban on deceptive claims including misrepresentations of government association, a requirement for robust compliance monitoring, and a mandate to obtain explicit consumer consent before collecting, selling, or sharing any personal data.
Keeping Out of the FTC’s Crosshairs
The magnitude of these settlements serves as a warning shot to the entire lead generation and telemarketing industry. We cannot emphasize enough, the FTC’s enforcement actions highlight the critical importance of transparency and integrity in consumer interactions. Businesses must:
- Avoid false or misleading claims about products, services, or affiliations
- Clearly disclose how consumer data will be used
- Obtain express informed consent for a sale
- Implement robust protocols and monitoring systems to ensure compliance, not only within their own operations, but across all partners and vendors as well
Director of the FTC’s Bureau of Consumer Protection, Christopher Mufarrige, stated: “Consumers should receive accurate, truthful, and non-misleading information about the coverage insurance provides.” The FTC has made it clear that it will not hesitate to act when companies fall short of this standard.
