Skip to main content
Iowa Attorney General
Main Content

January 31, 2018

South Carolina Businesses Agree to Halt Deceptive Iowa Mailings Designed to Generate Insurance Sales Leads

“Medicare update” mailings appeared to offer free health-related government benefits; Iowans who responded placed themselves on a sales list for insurance agents

(DES MOINES, Iowa) Two Myrtle Beach, South Carolina businesses and their principals will change mailings they may use to generate insurance leads in Iowa, through an agreement with Attorney General Tom Miller.

The agreement settles a dispute over “2018 Medicare update” mailings, which Miller alleged are misleading and violate Iowa’s Consumer Fraud Act.

The agreement, called an assurance of voluntary compliance, prohibits Choice Health Insurance LLC and National Direct Marketing LLC, and their principal owners, Dennis Watts and Michael Watts, from sending Iowans mailings that appear to come from a government agency or mislead recipients about the mailing’s true purpose. The agreement also prohibits mailings from giving the false impression that benefit programs are free, obscuring the true reason for seeking the consumer’s phone number, and using inconspicuous small print to disclose important information.

“We alleged that the mailings created the impression that they were government mailings advising Medicare recipients of additional benefits available to them at no cost,” Miller said. “While the mailings disclosed that they did not come from a government source and could lead to an insurance sales pitch, the disclosures were small and inconspicuous – they were too easily missed.”

According to Miller, personalized mailings to Iowa “Medicare recipients” announcing the availability of “new coverage benefits” stated that recipients “may be eligible for additional benefits” covering a range of health issues such as “dental, vision, hearing, prescription coverage,” and more.

The mailings also claimed that the programs were available “at no charge,” and asked the recipients to provide a phone number in order to find out “what benefits are available in your area.”

Miller said the mailings came to the attention of his office when a Consumer Protection Division attorney received one at home. The division alleged the mailings were misleading lead generation materials for insurance agents to target potential Medicare supplement insurance plan customers.

“In most cases it’s consumers who let us know about solicitations they think are deceiving. In this case, it was an attorney in our own office,” Miller said. “That’s important because some solicitations may be misleading in ways that typical consumers may not even realize.”

Through the agreement, the businesses and their owners will pay $2,000 to support future consumer fraud enforcement efforts.

###

« Back

Sitemap
© 2019 State of Iowa Office of the Attorney General. All rights reserved.