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The classified ad looked
like the perfect setup for a Cloverdale,
Ind., man: He could earn good money working
at home while caring for his three children
and sick wife. He called a toll-free number
and heard that for $377, he would get everything
he needed to launch a lucrative medical
billing business from home, including a
software program and the names of doctors
who wanted the service. If he wasn't completely
satisfied, he could return the package within
30 days for a full refund.
As it turned out, this
consumer wasn't satisfied. And he hasn't
been the only one. The Federal Trade Commission
(FTC) has received hundreds of complaints
from consumers about medical billing opportunities
whose promoters have advertised far more
than they've delivered. In one case, the
promoter claimed that for $325 to $495,
consumers could make as much as $50,000
a year running a medical billing business
from home. As the FTC alleged, most of the
consumers didn't earn a dime.
In the last few years,
the FTC has filed more than eight cases
against medical billing scams. Yet, as quickly
as these companies are put out of business,
others appear to take their place, says
Katherine Romano Schnack, an attorney in
the FTC's Midwest Region. In a surf of websites
and print advertisements by the FTC and
the Better Business Bureau in summer 2001,
investigators found more than 500 promotions
for medical billing opportunities, many
of dubious value.
Fraudulent medical billing
business opportunities are a type of work-at-home
scheme advertised on the Internet and the
classified sections of local newspapers
and "giveaway" shopper's guides.
In the "Help-Wanted" classified
sections, the ads often appear alongside
legitimate ads for hospital medical claims
processors, leading consumers who respond
to think they're applying for a job. "Consumers
don't realize what they're getting into,"
Schnack says.
The ads may lure consumers
with promises of substantial income for
full- or part-time work with "no experience
required." A toll-free number directs
consumers to call for more information.
When they call, they get
a high-pressure sales pitch that promises
big bucks for a relatively small investment.
"But the chances of making the money
claimed are slim to none," Schnack
says. "Newcomers to the medical billing
market - especially those with no experience
and no contacts in the medical field - face
fierce competition."
And the programs do little
to help consumers succeed. Once consumers
pay, Schnack says, "all they get is
an out-of-date database of doctors who haven't
asked for medical billing services, a sample
letter to use to find their own clients,
and a money-back "guarantee" that's
barely worth the paper it's written on.
Only a few people ever get a refund and
then, it's after repeated phone calls to
the company, or complaints to their credit
card companies or government agencies and
consumer groups."
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