"Obamacare" Affordable Care Act used as a front for new rash of scams: Internet Scambusters #628
With open enrollment in full swing for signing up for qualified insurance plans under so-called "Obamacare" -- the Affordable Care Act -- scammers are frantically busy selling phony policies.
They're also posing as officials from the new Health Insurance Marketplaces to try to get hold of information for identity theft.
We have the details in this week's issue, along with a warning about a bogus free pizza offer, in our Alert of the Week.
Let's get started...
Scammers Use "Obamacare" Inquiries to Steal ID Info
Misunderstandings and ignorance about the Affordable Care Act (ACA, or Obamacare as it's often known) has opened the door for scammers selling phony health insurance.
Regardless of your views about the Act and even what might happen to its key provisions in the future, ACA is a reality that many people are still grappling with today, more than a year after it was introduced.
Just a few months ago, the Federal Trade Commission announced charges against a company for tricking people, especially Spanish speakers, who had been seeking affordable health insurance, into buying medical discount cards that turned out to be worthless.
We predicted these scams a couple of years back in 10 Warning Signs Of A Health Insurance Scam before the changes became law.
But while many might have expected the tricksters to fade away once the provisions were in full swing and everyone knew about them, that hasn't happened. In fact, things have gotten worse.
In the latest scam halted by the FTC, victims were told the insurance they were buying would cover most healthcare services, without deductibles and regardless of pre-existing conditions.
Many of them had responded to ads and calls from a lead-generation company. Their details were then acquired by the scammers.
Victims were assured they would be covered with a Qualified Insurance Plan and were asked to pay an enrollment fee of up to $200 and then a monthly payment of around $100. But they were totally uninsured!
In other scams, victims have been bombarded with threatening spam emails warning that if they don't click on a link that day, they'll miss out on subsidized insurance coverage.
The only way to counter this type of scam is never to buy health insurance purely on the basis of solicitations -- by phone, email or at the front door.
Instead, if you're seeking insurance under the new provisions, speak to a reputable broker or visit healthcare.gov, which explains the new Health Insurance Marketplace and provides links for comparing plans.
If you're in a hurry, check out A One-Page Guide to the Health Insurance Marketplace for a quick overview.
These sorts of scams are likely to be ongoing but a worrying new risk has blown up, in which crooks may pose as Marketplace officials to gather information for identity theft.
That's because Marketplace officials may actually be calling applicants to verify information they've already provided.
For example, a legitimate caller may want to know the last four digits of your Social Security number and ask questions about your employment and household information.
But what a genuine caller WON'T ask for is personal financial information such as bank account numbers.
Although not foolproof, genuine communications will also contain government seals and logos or, if via email or online, they'll use the ".gov" suffix in their web addresses.
Caller ID may also show one of the following legitimate indicators or numbers (though again these can be spoofed by crooks):
"Health Insurance MP"
Other tips to protect your security when dealing with the Marketplace include:
- A genuine agent will give their name and ID number. If they don't, ask for them. And always write them down.
- Know the Marketplace open enrollment dates (in 2015 these end on February 15). With a few exceptions, no one can enroll you in a Qualified Health Plan outside the official period. Of course, this doesn't stop you seeking health insurance outside the Marketplace, with a regular health insurance company for instance, but you can't get a new Marketplace plan.
- Never provide a caller with personal financial or medical information. Genuine agents will not ask for this.
- Someone who calls from an insurance company other than the one you've chosen and asks you to pay or provide financial information is most likely a scammer.
- So is someone who claims to be an official but uses the "Obamacare" term and says you have to pay for a new "Obamacare" card.
- Double check any information that you don't understand or seems suspect; call the Marketplace at 1-800-318-2596 (TTY number: 1-855-889-4325). Also, call this number if you suspect fraud.
- Even if the call is genuine but you feel uneasy about giving required information on the phone, you can ask the agent to mail a letter with instructions on completing your application.
The FTC says: "If you're looking for health insurance, make sure that's what you're buying. Your state insurance commissioner's office can tell you if a plan isn't insurance -- and whether the seller is licensed in your state -- and may be able to alert you to a scam. Find your contact at naic.org or consumeraction.gov.
"A legitimate medical discount plan can be a way for some people to save money on their healthcare costs, but no discount plan is a substitute for health insurance."
One way or another, we're sure that "Obamacare" will remain in the headlines throughout 2015, but, if it affects you, follow these rules to make sure you don't become part of the news too.
Alert of the Week
Sorry, but there are no free personal pan pizzas to celebrate Pizza Hut's 55th birthday, despite what you may have read in an email or on social media.
Clicking on the coupon will simply open the way for downloading malware onto your PC.
That's all for today -- we'll see you next week.