immediate release --December 20, 1999.
Contact Bob Brammer, 515-281-6699
Settles Suit With Company That
Sold Medical Discount Cards
alleged that American Discount Services, Inc., made false claims about
drug and medical discounts and targeted older Iowans. Company is ordered
to pay $10,000 in restitution and is prohibited from making misrepresentations.
The Attorney General's Consumer Protection Division has obtained a court
order concluding a lawsuit that alleged a Des Moines company called American
Discount Services Inc. made false promises to older Iowans in selling
health discount cards. The company was ordered to pay $10,000 in restitution
as a result of a consent judgment and order entered Friday in Polk County
The defendants also
were permanently prohibited from making any misrepresentations about health
discount cards. The defendants were ordered to pay a civil penalty of
$25,000 if they fail to comply with the consent judgment and order.
The discount cards
were supposed to provide price breaks on items such as prescription medications
and care provided by physicians, dentists, chiropractors and others. The
lawsuit, which was filed last March, alleged the discounts were exaggerated
and sometimes were not available at all. Roland L. Huff, Sr., of Des Moines,
also was a defendant in the suit.
"We alleged that
the defendants made false representations that consumers' health care
providers and pharmacies would provide price breaks to persons with the
discount cards," said Attorney General Tom Miller. "We alleged
that they targeted older Iowans, induced consumers to authorize withdrawal
of hundreds of dollars every year, but then failed to provide the promised
price breaks." In some cases, the company provided no cards or information
at all for many months, Miller said.
Miller said American
Discount Services stopped operations after the suit was filed. The defendants
did not admit the allegations, but they agreed to the consent judgment
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