BBB Investigation Prompts FTC Action against Wisconsin Business Owner

A three-year investigation by the Better Business Bureau Serving Wisconsin has resulted in injunctions and restraining orders by the Federal Trade Commission (FTC) of Gary L. Kieper, the owner of an Appleton-based business, Partners In Health Care (“PIHC”) and its marketers, United Solutions Group, of Florida and its principals Walter S. Vargas and Constanza Gomez Vargas.

The scheme tricked Spanish-speaking and other consumers, nationwide.

The investigation began in September, 2011, after the BBB started receiving a pattern of complaints alleging that the company was selling medical insurance. However, what consumers reported receiving was a medical discount card which was practically worthless.

Complainants allege they paid a “one time non-refundable enrollment fee” of $99 and subsequent monthly payments ranging from $119-$514 per month. In part, complainants state they feel the plan was misrepresented because what they received was not insurance.

In our current three year reporting period, the BBB Serving Wisconsin has processed 59 complaints from consumers in 32 states. Partners In Health Care has an “F” report, the BBB’s lowest grade.

“When the BBB discovers wrongdoing by a company, we’re quick to alert law enforcement agencies to bring those who defraud consumers to justice,” said Ran Hoth, BBB CEO & President. “We’re thrilled that our investigation led to the FTC’s action. It’s a complete shame that people who so desperately needed health insurance, instead, lost money they could not afford to lose, because they were duped by this firm and its marketers.”

According to the FTC, all of the defendants allegedly misrepresented the discount cards as health insurance, in violation of the FTC Act. Kieper and Partners In Health Care also allegedly violated the Telemarketing Sales Rule (TSR) by misrepresenting the cards and assisting and facilitating telemarketers that were violating the TSR.

On August 25, 2014, the court entered a temporary restraining order halting the deceptive scheme, freezing the defendants’ assets and appointing a receiver to manage the corporate defendants.

The FTC complaint calls the for-profit Wisconsin corporation “the center of the deceptive scheme” stating, “The defendants’ fraudulent scheme preyed on consumers searching for health insurance.”

In addition, the FTC complaint alleges that the Florida-based United Solutions Group Inc. a/d/b/a Debt Relief Experts targeted Spanish-speaking consumers by using Spanish-language radio advertisements, television advertisements and the internet to induce the purchase of the discount cards. Telephone sales scripts were allegedly provided by PIHC.

Lyman A. of California says, “I paid $372 to buy a health insurance plan. I was misled by the salesman who represented the plan as a PPO and that my hospital was in their network. Absolutely no one would accept the health card they sent me including pharmacies. My bank account was charged for another premium on the day I cancelled the plan. I was told a check would be mailed to me for the full amount, but it never came. This company has been deceptive and incompetent from the start.”

Rouaida E. of North Carolina says PICH “Is a scam company trying to lure people with their phone marketing tactics and pitch to sell their services, but they don’t deliver what they promise…..I already paid more than $422, I could’ve used this money to pay my medical bills. A well organized scam.”

Gary Kieper responded to nearly all complaints, usually by stating the consumer did not purchase the policy from PIHC, but enrolled through an out of state company. Or, often stating the consumer did not request a refund in the allotted time. Often, Kieper attempted to refer the BBB to the out of state sellers of his program. In responses, Kieper has referred to his company as the “billing and collections company”, the “processing company”, “developers of the product” and the “fulfillment and customer service” entity. Refunds were made in some cases.

However, PIHC continually failed to correct the underlying cause of complaints.

Complaints to the BBB include a large pattern; product misrepresentation, delay in receiving refunds, promised and full refunds not received, dissatisfaction with the product, difficulty in reaching the company, product not received within a specific time frame, non-information regarding the cancellation policy, and inability to cancel.

Partners in Health Care also did business under the names PIHC, Allied Veterans Advisors, Inc., Senior Advantage of Wisconsin, The Advantage Savings Program, and Tri Resource Group, Ltd.

According to the Wisconsin Office of the Commissioner of Insurance records, Gary L. Kieper has not been licensed to sell insurance in Wisconsin since April, 1998.