Tuesday, May 31, 2005

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Attorney General Abbott Sues Fraudulent Mail-Order Prescription Drug Service

AUSTIN - Texas Attorney General Greg Abbott today sued a mail-order prescription drug service for exploiting seniors who need reduced-cost drugs by asking them to commit fraud by lying to drug companies about their income.

Drug companies offer programs in which qualifying seniors can obtain free prescription drugs. Each drug company has different income qualifications for their programs, but these are not solely dependent upon the person’s Social Security income.

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State's lawsuit against Senior RX Support, Inc



In this case, the Attorney General accuses Senior RX Support of Dallas of offering to short-cut the process by filling out discount forms on consumers’ behalf for a fee, then asking them to report only their Social Security income in order to obtain the discounts. The company failed to tell consumers that drug companies already offer reduced-cost programs for consumers based upon their total income and not Social Security only.

“This company duped seniors into paying for a service that was already available for free, then made matters worse by asking them to lie about their income to obtain discounted drug prices,”said Attorney General Abbott. “This practice hinders needy seniors from obtaining their medications, and it will not be tolerated in Texas.”

The defendant advertised over the Internet and through insurance agents who had access to potential clients. To qualify for the program, seniors first paid Senior RX Support a $20 enrollment fee, plus $60 per prescription per year. After paying the fees in advance, the consumers received the necessary paperwork for enrolling in the program.

Then, Senior RX Support instructed them to report only their Social Security income to drug companies, even if the information they gave was incomplete. Many seniors balked at being instructed to only report their Social Security income when the drug companies were asking for disclosure of all income, and these consumers asked for a refund of the fees paid. Senior RX Support refused to refund more than 75 percent of the fees.

The Attorney General’s lawsuit, brought under the Texas Deceptive Trade Practices Act, seeks restitution for consumers affected by the scheme, civil penalties of up to $20,000 per violation, and a $250,000 enhancement to the penalties for targeting consumers over the age of 65.