Court Halts Deceptive Free Prescription Claims

A company that lured low income consumers with no insurance into spending $199 with false claims that they would receive free prescription medication has been barred from making the deceptive claims by a U.S. District Court at the request of the Federal Trade Commission. The Court also froze the defendants’ assets to preserve them for consumer redress.

According to the FTC complaint, defendants, MyFreeMedicine.com, LLC (“MFM”) and its principal Geoffrey Hasler, target low income consumers who spend more than $100 a month for medications. These consumers might qualify to receive free prescription medicine through one or more of the many patient assistance programs – PAPs – operated by pharmaceutical companies. The PAPs impose varying eligibility requirements on consumers and not all drugs are available through these programs. Those that are may only be available some of the time, or in certain doses.

The defendants’ television and radio ads urge consumers who are not covered by insurance to call a toll-free number to find out if they are “eligible” to receive free prescription medications. Defendants’ sales reps routinely told consumers that they were eligible to receive free prescription medication and that their medications are available through their program. The sales reps also told consumers that the company deals directly with pharmaceutical companies and the federal government to obtain free prescription medications for consumers, and that the company would provide the medication directly to the consumers or to their doctors. In fact, consumers did not get medications from MFM. The company simply provided them with PAP application forms that must be submitted to the pharmaceutical companies. After paying $199.95 for a six-month enrollment in defendants’ program, many consumers learned that they were not eligible to receive their prescription medications for free from a PAP, or that their prescriptions were not available from a PAP.

Contrary to claims on their Web site and in telephone conversations with consumers, the defendants have routinely denied requests for refunds from consumers who were not able to obtain their medications through their program.

The agency charged the defendants, based in Louisville, KY, with violations of the FTC Act. The complaint was filed in U.S. District Court for the District of Washington in Seattle. A hearing to extend the temporary ban is scheduled for October 21, 2005.

The FTC has published a consumer alert, “No Need to Pay for Information on Free (or Low-Cost) Rx Drugs” that is available at: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt141.pdf

The Commission vote to authorize staff to file the complaint was 4-0.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the complaint are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(Civil Action No. CV5 1607P)