We've all seen ads like this one. Usually they come on in the middle of the day, when only the unemployed, or those people sick>"/>
We've all seen ads like this one. Usually they come on in the middle of the day, when only the unemployed, or those people sick enough to DVR "Judge Judy," are watching.
Everything about the commercial screams "too good to be true." The greenscreened shot in front of the Capitol dome. The American flag plus bronze-eagle-on-the-desk combo meant to reinforce just how GD Amurrican this company is. The comprehensive health insurance for under $200 a month. (What is this, Sweden?)
So, looks like a scam. Sounds like a scam. Gotta be a...scam. Right? Right.
According to Rich Roesler at the Washington State Office of the Insurance Commissioner the insurance these ads offer is illegal. But past that, things get a little fuzzy.
Ya see, in order to legally offer consumers insurance, you have to register with the Insurance Commissioner's office. This lets them do a little background research on you to make sure your word is good when you say you'll pay people's claims/aren't just there to rip them off.
These groups (and when I say that, I'm referring to something called Serve America, the American Trade Association, and five other connected subsidiaries, including one that's based in Pakistan of all places) haven't registered in Washington. Which means we know squat about their practices, except that (according to 70 or so very disgruntled customers who filed complaints) they're not very good at reimbursing customers who file claims.
"These people are completely under the radar," says Roesler. "They advertise with blast faxes. They create websites that will be up for a while and then switch to a different site. Sunshine does not favor this kind of business."
And neither does the fact that these businesses seem to be running the same scam elsewhere. In filing a cease-and-desist order, Washington joins Michigan, Connecticut, Oklahoma, North Carolina and Indiana as states that have publicly threatened to give Serve America the boot.
As for what might be driving them. Well, the answer begins and ends where it usually does: easy money.
"There's definitely a feeling here among our investigators, partly because of a bad economy and partly because of double-digit insurance inflation, that people are so desperate to find coverage that they can afford it tends to make them pray to scams that in many cases are too good to be true," says Roesler, adding: "If you could really get comprehensive coverage for $200 a month, everybody would be doing it."
The lesson, as always: Watch daytime TV at your own peril.