American Senior Alliance Gets Busted with Two Others

Feb. 26, 2006 - One of the most notorious mass mailers of materials to senior citizens that were thinly designed to look as if they were an official government message has finally been busted. American Senior Alliance, Inc. and owner George R. Katosic were sued, along with two other companies and their owners, by Texas Attorney General Greg Abbott for "bombarding seniors in Texas and across the country with deceptive, unsolicited mailers.

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AG Abbott says the mailers were designed to dupe seniors into sending the companies their personal information. The Attorney General’s lawsuits allege the companies then use the information to develop sales leads for insurance, financial and other companies.

Named in the other two lawsuits filed on February 20 were America’s Recommended Mailers Inc. and owner Tina Hennessy, and Lead Concepts Inc. and owner Christopher Weir.

The lawsuits allege the companies induce seniors to fill out information cards under the pretext of promising updates on Social Security or Medicare laws or new investment developments regarding prepaid funeral plans, annuities and living trusts.

“Tricking senior Texans into turning over their personal information is one of the lowest forms of fraud,” Attorney General Abbott said.

“These companies are fooling senior citizens into believing they have to respond to these mailings or risk losing their Medicare, Social Security or other government benefits. These businesses are operating this nationwide deception from Texas, and Texas will be the state to stop them. Seniors should ignore these fraudulent mailings.”

The Attorney General alleges the three are violating the Texas Deceptive Trade Practices Act by not disclosing in their mailers which companies or individuals are using the returned personal information. They also use deceptive association names that give a false impression of endorsement by legitimate nonprofit or senior advocacy groups. The companies also do not indicate to seniors that their personal information may be used as leads for insurance agents, telemarketers or others who may later persuade them to buy insurance or other products.

The three companies operate independently and even compete for business, but their misleading methods to induce seniors to act are similar, according to the Attorney General’s investigation. The deceptive pieces feature bold typeface and use all-capital letters to convince seniors to send their personal information.

The mailers purport to help educate seniors about financial planning or new developments in health care and the law. Announcements such as “Medicare supplemental coverage update” and “legislation that standardizes entitlement provisions for persons 65 and older” are deceptively crafted as attention-getters, prompting seniors to quickly reply with their personal information.

Other mailers urge seniors to act quickly to obtain “free hard facts and straight answers” regarding prescription drug benefits and how several changes in laws affecting the elderly can affect them or their heirs. The mailers trumpet new congressional legislation allowing seniors to avoid paying estate taxes or taxes on investments or Social Security. Others suggest ways to exempt assets from government collection in the event of an illness.

The Attorney General is requesting penalties of up to $20,000 per violation, plus an added penalty of up to $250,000 for acts that harm anyone 65 or older. In addition, the lawsuit requests penalties of up to $10,000 per violation of the Texas Insurance Code, as well as attorneys’ fees and investigative costs.

Consumers who believe they may have been defrauded by a deceptive mail business may file a complaint with the Attorney General’s Office by calling toll-free (800) 252-8011 or accessing the agency’s Web site at www.oag.state.tx.us.

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