Every single one of us – don’t even try to deny it – has been taken, conned, hustled, scammed, bamboozled, fleeced, tricked, exploited, fooled or just plain misused at one point or another. We fall for the professional panhandler, giving him or her cash to just ‘go away’, or the kid at the door selling candy or wrapping paper, or the guy who needs $20 to get home – honest! – or the persistent, utterly charming telemarketer, and so on and so on and so on.
Internet scams are just a version of the same approach, and insurance cons are notorious. And even decent, licensed agents get pulled in from time to time and are caught selling unauthorized products or phony plans without their realizing it. Of course, had they done a bit of homework they would have discovered that the plans were bogus or the ‘company’ was a fraud, but sometimes the lure of a good sale gets in the way of common sense and prudence.
It’s embarrassing; we never like admitting anyone has taken advantage of us. But it’s really worse than just embarrassing. Insurance fraud undermines our willingness to trust an indispensable safeguard of our financial security. Insurance allows us to protect ourselves and our loved ones and recover from adversity, all sorts of adversity. If we decide we don’t want or need any coverage, fine. But when we do go ahead and purchase life or homeowners or health insurance in the belief that it will be there when we need it, and it isn’t – that’s bad for us all.
Unwary insurance customers are very vulnerable to sales scams, and the ‘medical’ discount cards have been a real problem over the past few years. They sound okay, and may even work once in a great while, but there are far more risks than rewards. Why?
- You could lose your health coverage: If you have been convinced that you, a smart and proactive consumer, have found a better health plan, you might go ahead and cancel your traditional health insurance. Lo and behold! you are injured or get sick and the bills are huge. Your discount card will get you exactly nowhere: you have no health insurance.
- The discounts that were promised have been hugely overestimated, or don’t exist at all: There will be hidden fees and membership dues that eat into your discounts; the card may not be taken any place you use; you have to pay far more than you were led to believe.
- You are responsible for consequent medical expenses: You will have to pay all medical bills yourself – remember, a discount plan is not health insurance.
- Your health and care may be compromised: You signed on believing you had access to good medical facilities and providers; you do not. You forgo treatment and care.
- Your identity, money and financial information may be stolen: According to FTC investigations, scam companies have obtained credit card and checking account information of consumers over the phone while trying to sell them discount cards. They then billed the consumers all sorts of unauthorized charges – even when the consumers declined the offer.