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littleroundman
03-07-2012, 01:04 AM
Colorado AG sues Highlands Ranch firm for violations of consumer protection act

By Howard Pankratz
The Denver Post

Colorado Attorney General John Suthers alleged today that a Highlands Ranch company and its owner recruited 12,800 "affiliates" to sell medical benefits programs but that few made money.

Instead, the lawsuit, which alleges violations of the Colorado Consumer Protection Act by Consolidated Medical Services LLC, and its owner, Joseph Benedetto, claims the people selling the program had to pay startup fees ranging from $35 to $345, as well as monthly "maintenance and hosting fees" of $29.95 to sell the medical benefits programs online.

The lawsuit also alleges that the company enticed the recruits to pay hundreds and often thousands of dollars for additional marketing products and services.

According to the lawsuit, Consolidated Medical Services recruited 12,800 affiliates between 2008 and July 2011. Of these suspected victims, only 382 - less than 3 percent - made any money, according to the allegations. According to the complaint, the great majority of this 3 percent paid out more money than they earned.

The lawsuit alleges that Benedetto developed the "affiliate program" and was "aware that few, if any, consumers are actually successful using the company's program..."

The lawsuit also alleges that the company's and Benedetto's telemarketers misrepresented the coverage offered by the medical programs, both to the affiliates and consumers of the program.

The medical benefits programs marketed by the defendants include Real Benefits Association, National Association of Business Leadership, and United States Contractors Trust.

The lawsuit alleged that the programs regularly failed to pay consumers' claims, and the programs have been subject to cease and desist orders from insurance regulators in at least 10 states.

Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com

Colorado AG sues Highlands Ranch firm for violations of consumer protection act - The Denver Post (http://www.denverpost.com/breakingnews/ci_20113341/colorado-ag-sues-highlands-ranch-firm-violations-consumer)

scratchycat
03-07-2012, 09:22 AM
Glad to see they got caught and are having to 'pay up'!!