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Important News about Medical Billing Opportunities
A federal district court has issued a Temporary Restraining Order with Asset Freeze against an Orange County, California company that purportedly sold work-at-home medical billing opportunities. Data Medical Capital, Inc. and its owner Bryan D'Antonio, promised consumers that they could earn a minimum of $23,400 per year using their home computers to process medical bills for physicians with whom the defendants had established relationships. The Federal Trade Commission alleges that the defendants misrepresented their medical billing work-at-home opportunities by bolstering false earnings claims and misrepresenting the assistance that consumers would receive in getting medical billing work. The Commission has asked the court to continue the asset freeze, issue permanent injunctions and order the defendants to pay consumer redress.
So what’s a consumer to do? The FTC says it’s critical for consumers interested in buying a business
opportunity to know their rights. For example, the FTC’s Franchise Rule requires most business opportunity
promoters to provide certain kinds of information. Says Salsburg: “Consumers should know to look for the
information. If it’s not there, the opportunity isn’t worth pursuing.”
The Franchise Rule
The FTC Franchise Rule is designed to protect would-be business owners from abuses by fraudulent
promoters. The Rule requires promoters of business opportunities that sell $500 or more to provide prospective
buyers with certain information. For example, if the promoter claims — even in an ad — that buyers can
make a certain amount of money, the number and percentage of previous purchasers who achieved that level
of earnings must be included.
Promoters also must provide a franchise disclosure document that includes basic information about the
promoter’s company, including whether it has faced any lawsuits from purchasers or lawsuits alleging fraud.
In addition, the promoter must give potential purchasers the names, addresses and phone numbers of at least
10 previous purchasers who live closest to the potential buyer.
If you’re interested in pursuing a business opportunity, the FTC advises you to:
- Look at the ad. If it includes an earnings claim — but not the number and percentage of people
who achieved it — the business opportunity seller is probably violating the law.
- Search the business opportunity’s franchise disclosure document for a statement about previous
purchasers. If the document says there haven’t been any previous purchasers but the seller offers a
list of references, be skeptical: the references probably are phonies.
- Get the list of 10 previous purchasers and interview each in person, preferably where their business
operates. This can help reduce the chances of being misled by phony references.
Even if the business opportunity sells for less than $500 and is not required to provide this information,
Salsburg advises consumers to get it anyway — in writing. And, the FTC attorney says, “take your time.
Promoters of fraudulent business opportunities often use high-pressure sales tactics to get you to buy in. But if
the business opportunity is legitimate, it’ll be around when you’re ready to decide.”
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