Defendant in FTC Case Charging Deceptive Telemarketing of Medical Equipment Agrees To Settle

Motion Medical, Inc., based in Blacklick, Ohio, and company president Anton Albert Wood have agreed to settle Federal Trade Commission charges stemming from their role in an allegedly deceptive scheme to telemarket medical equipment to consumers nationwide. In May 1995, in a complaint filed in a federal district court, the FTC charged that Motion Medical, as well as a number of other corporate and individual defendants, pitched one type of product to consumers -- for example, a scooter -- but then obtained physician approval and made insurance claims for other, more expensive, equipment -- such as a motorized wheelchair. In some instances, the FTC charged, the defendants filed insurance claims listing items and accessories that were never discussed with, or ordered by, consumers. The settlement with Motion Medical prohibits the company and Anton Wood from misrepresenting any product or service they telemarket in the future. In addition, the settlement includes a $300,000 judgment against the corporate defendant, a $46,700 judgment against defendant Wood, and requires him to obtain a $150,000 performance bond before he engages in the sale of durable medical equipment.

At the same time, the defendants have also agreed to settle a case based on similar allegations, filed by the U. S. Attorney’s Office for the Southern District of Ohio.

The FTC had alleged that the defendants made unsolicited sales calls to disabled persons whose names had been obtained from such places as motor vehicle department records and trade shows for the disabled. The telemarketers allegedly told consumers that the medical equipment they were selling would cost the consumers nothing out-of-pocket, because their health insurers would pay for equipment they ordered and the defendants would accept whatever payment the insurers sent and waive any co-payments.

According to the FTC, the defendants then contacted consumers' physicians to obtain prescriptions or "certificates of medical necessity,” and submitted claim forms to their health insurers. In many instances, the FTC charged, the defendants made claims for costlier equipment that would be covered by insurance, and that defendants had not provided to consumers.

The settlement, in addition to the monetary provisions, permanently prohibits the defendants from making the kinds of misrepresentations alleged in the complaint, and from making any misrepresentations in connection with telemarketing. The order also contains various reporting requirements to assist the FTC in monitoring the defendants' compliance.

The Commission vote to approve the settlement for filing was 5-0. The settlement was filed in U.S. District Court for the Southern District of Ohio, Eastern Division, on May 10, and approved by the court on May 20.

NOTE: This stipulated final judgment and order for permanent injunction is for settlement purposes only and does not constitute an admission by the defendant of a law violation. The stipulated final judgment has the force of law when signed by the judge.

Copies of the stipulated final judgment, as well as other documents associated with this case, are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

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(Civil Action No. C2-95-511)

(FTC File No. X95 0042)