September 27, 2006
Authorities in several states are warning consumers to avoid a new scam, which solicits participants in a phony group health insurance plan.
The solicitors, operating under the name National Trade Business Alliance of America, claim to provide inexpensive health plans through a number of legitimate insurers.
In most cases, consumers are being asked to pay an application fee of $136 and a monthly premium of as much as $207. The consumers, it turns out, get nothing for their money.
So far, more than 300 people nationwide have been victimized by the scam. An investigation by the Kentucky Office of Insurance has found more than seven victims in the state.
"These consumers have paid money for a bogus product. They do not have health insurance coverage," said Julie Mix McPeak, executive director of the Kentucky agency.
McPeak said her office is trying to gauge the extent of the scam. The insurer notified KOI that it denied an application from NTBAA for a group plan but later discovered that NTBAA and PBC Direct were advertising the insurer's products through printed materials and a Web site.
"These scam artists are getting more sophisticated," said McPeak. "It becomes even more important for consumers to be alert and to verify that the company and any individuals involved in an insurance transaction are properly licensed and authorized to do business in Kentucky. Consumers also should be suspicious of extremely low premiums."
