District Declares Fraud Awareness Week, July 22 to 28

By Michelle Phipps-Evans

For the third year in a row, the District of Columbia Department of Insurance, Securities and Banking (DISB) declared Fraud Awareness Week, which coincided with the District government’s anti-fraud town hall meeting, Protecting Our Seniors Together, on July 26. DISB, the Department of Consumer and Regulatory Affairs’ Office of Consumer Protection (DCRA) and the DC Lottery and Charitable Games Control Board co-hosted a town hall meeting at the Washington Seniors Wellness Center in Ward 7. About 100 energized seniors from around the city poured into the southeast location to listen for two-and-a-half hours about consumer fraud, lottery fraud and financial fraud.

About 100 seniors attended the DISB-DCRA-DC Lottery-sponsored anti-fraud town hall meeting for seniors on July 26 in Ward 7.

“Kudos to all of you for your excellent presentations and for your direct and immediate interactions with the seniors,” said Elise Nicholls, the center director. “Comments from the seniors are in unison. It was a great program and they all learned something.” DISB, DCRA and DC Lottery staff spent some time after the event interacting with seniors and others who had more direct questions and needed help.

Mayor Adrian M. Fenty issued a proclamation declaring Fraud Awareness Week to signify the government’s commitment to the fight against fraud. With the numbers of incidents rising from fraudulent activities against the District’s vulnerable populations, especially seniors, immigrants and working poor families, the District government has taken decisive action in ensuring these groups are knowledgeable about different types of scams and what they can do to protect themselves.

DISB recently received 83 complaints about misleading sales of Medicare Part C products to seniors at several District seniors’ homes. The complaints were related to seniors having difficulties in getting medical insurance claims paid, accessing their primary care doctors, unexpected out-of- pockets expenses and problems with admittance to area hospitals. DISB learned that six insurance producers began selling the Advantra Freedom Plan-Medicare C to seniors, which resulted in the replacement of their traditional Medicare plans. According to complainants, the salespersons told them that the benefits and out-of-pocket expenses allowed under Plan C would not alter their original Medicare A & B. The Part C offered added coverage for dental and optical services. However, most of the seniors ended up being faced with the problems of having out-of-pocket expenses, and the frustration with finding a provider since their regular doctors did not participate in the limited Preferred Provider Organization network. 

Targeting the elderly is a calculated economic strategy on the part of scammers.

According to a resident at one seniors’ home, “There are still between 30 to 40 residents who are stuck in an insurance that is an HMO (Health Maintenance Organization) and may have to use doctors participating in the HMO network. The problem is not only nonpayment to our doctors and us incurring charges but also having to go to unfamiliar doctors. Many of us have been with our doctors for 20 years or more.” She recently appeared on Capitol Hill to talk about hers and other residents’ experiences.

“This is not only happening in the District of Columbia, it is happening across this country to those of us who may be too frail to fight back,” wrote the resident in her testimony. “It is not just enough for a company like Advantra Freedom to fire the insurance agent who may have innocently presented information that the companies gave them and not fire the companies from this program.”

As these problems are nationwide, insurers have suspended sales of the Medicare Part C product until the Center for Medicaid and Medicare Services develop and adopt marketing guidelines. So far, DISB has been collecting information to determine if there are other seniors affected who have not yet contacted the agency. DISB believes there may be seniors who have not consulted with their physicians since purchasing the plan, and therefore, have no idea of the changes to their original plans. The agency is collaborating with the Health Insurance Counseling Project to provide free Medicare information, counseling and legal services to seniors and those with disabilities.

“Fraud affects everyone and its impact is felt worldwide,” said DISB Commissioner Thomas E. Hampton. “Today, both business and government organizations face new challenges in the effort to detect, prevent and investigate fraud. That is why DISB will continue to work harder in educating several vulnerable segments of our population as the fraud schemes become more sophisticated.” Targeting the elderly is a calculated economic strategy on the part of scammers. According to the Boston Foundation, older Americans (those over 60) in the United States are estimated to control the majority of the country’s household wealth. About 80 percent of 65-plus Americans own their homes, an ownership percentage far above the U.S. average, and 76 percent of older Americans own their homes free and clear, according to the American Housing Survey for the United States, US Census Bureau. This makes them easier targets for scammers.

Besides the anti-fraud town hall meeting for seniors, DISB had launched its information-driven campaign against fraud from July 22 to July 28 to continue to increase awareness and to promote the fight against various types of fraud in the financial-service industry. This year, the agency sent out information geared toward different population segments. Fraud takes many shapes. It could be health insurance fraud, credit card fraud, mortgage foreclosure scams and equity stripping, identity theft, the Nigerian letter scam or lottery fraud. If there is a way for someone to separate a person from his or her money, that person will find a way. According to the Coalition Against Insurance Fraud, insurance scams robbed the country of nearly $80 billion a year (that is almost $1,000 per family). It is estimated that investment fraud totals about $40 billion per year and check fraud alone accounts for yearly losses of at least $815 million. These numbers led DISB to have this special week once a year dedicated to identifying, examining and building awareness about fraud.

Any District resident needing more information on Fraud Awareness Week or to report suspected fraud, should contact DISB at (202) 727-8000 or its Enforcement and Investigation Bureau at (202) 727-1563. For more information on fighting fraud, visit DISB’s website at disb.dc.gov.

Michelle Phipps-Evans is the senior public affairs specialist in DISB’s Office of Communications.