Unscrupulous lead-generation companies penalized a staggering $145 million for misleading health insurance consumers.
Following recent FTC settlements with Assurance IQ and MediaAlpha, current regulations and consumer protections against deceptive health insurance lead generation have been strengthened.
Assurance IQ, a Seattle-based lead generator, and MediaAlpha, Inc., based in Los Angeles, were fined a total of $145 million for misleading millions of consumers. The companies were found guilty of misrepresenting short-term and limited health insurance plans as comprehensive, using deceptive websites, and engaging in abusive robocall campaigns—even to those on the Do Not Call Registry.
Key elements of the FTC-enforced protections are:
- Prohibition of deceptive marketing: Companies cannot misrepresent the nature, coverage, or benefits of health insurance plans, particularly differentiating limited or short-term plans from comprehensive ACA-compliant coverage.
- Informed consumer consent: Explicit, express consent is required before companies charge consumers or collect personal data, preventing unfair billing practices and unauthorized data use.
- Restrictions on lead generation and telemarketing: The FTC imposes controls on how consumer leads are collected, forbidding the sale of misleading leads and the use of robocalls or telemarketing that violate the Do Not Call Registry.
- Compliance monitoring and enforcement: The settlements mandate ongoing oversight of these companies’ marketing and data handling practices, with penalties for violations including refunds to consumers and domain forfeiture to prevent continued deception.
These regulatory actions reflect the FTC’s broader priority to systematically address unlawful health insurance lead generation that harms consumers, particularly in a market with complex and potentially confusing insurance products. The $145 million settlements fund refunds for affected consumers and set a precedent for increased scrutiny and enforcement against similar deceptive practices in the health insurance industry.
In summary, the current protections are concrete FTC-enforced legal orders that safeguard consumers by targeting misrepresentation, ensuring informed consent, regulating telemarketing and data sale practices, and requiring active compliance monitoring in health insurance lead generation. Both Assurance IQ and MediaAlpha are required to adhere to these regulations moving forward, with penalties for non-compliance.
[1] Federal Trade Commission. (2021). Assurance IQ to pay $100 million to settle FTC charges that it deceived consumers about health insurance plans. Retrieved from https://www.ftc.gov/news-events/press-releases/2021/07/assurance-iq-pay-100-million-settle-ftc-charges-it-deceived
[2] Federal Trade Commission. (2021). MediaAlpha to pay $45 million to settle FTC charges that it deceived consumers about health insurance plans. Retrieved from https://www.ftc.gov/news-events/press-releases/2021/07/medialpha-pay-45-million-settle-ftc-charges-it-deceived
[3] Federal Trade Commission. (2021). FTC Charges Assurance IQ with Deceptive Marketing of Health Insurance Plans. Retrieved from https://www.ftc.gov/news-events/press-releases/2019/11/ftc-charges-assurance-iq-deceptive-marketing-health-insurance
[4] Federal Trade Commission. (2021). FTC Charges MediaAlpha with Deceptive Marketing of Health Insurance Plans. Retrieved from https://www.ftc.gov/news-events/press-releases/2019/11/ftc-charges-mediaalpha-deceptive-marketing-health-insurance
[5] Federal Trade Commission. (2021). FTC Settles Charges that Assurance IQ Misled Consumers about Health Insurance Plans. Retrieved from https://www.ftc.gov/news-events/press-releases/2021/07/ftc-settles-charges-assurance-iq-misled-consumers-about-health
- The FTC's recent enforcement actions against Assurance IQ and MediaAlpha, two lead generation companies, have highlighted the importance of compliance in the health-and-wellness industry, particularly when it comes to medical-conditions and insurance plans, as financial inaccuracies can have severe consequences for consumers.
- In light of the FTC's stricter regulations, businesses engaging in health-and-wellness marketing, such as those in the finance sector, may need to reassess their lead generation and telemarketing strategies to ensure they adhere to the FTC's guidelines, focusing on transparency, informed consent, and thorough understanding of their offerings.
