Markets Wired

Two companies that recommend long-term care facilities for senior citizens have agreed to settle Federal Trade Commission charges that they misled consumers to think that they had researched the facilities and had detailed knowledge about them.  The proposed settlements, which prohibit the respondents from misrepresenting their services in the future, resolve the FTC’s first cases involving Internet-based companies that offer placement assistance for seniors who need institution-based, long-term care.

“Senior citizens need honest information when they’re considering long term care options,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection.  “Companies that claim to know which facilities to recommend to consumers need to be able to back up their claims or they will hear from the FTC.”

According to two administrative complaints issued by the FTC, CarePatrol Inc. and ABCSP Inc. offer consumers free assistance to obtain placements at care facilities for senior citizens, and state that the facilities pay the companies for the placements.  CarePatrol operates via franchises in 12 states; ABCSP, which also does business as “Always Best Care,” operates via a network of franchisees throughout the nation.

            As alleged in one complaint, CarePatrol’s claims include:

• “We Grade Each and Every Facility From ‘A’ to ‘F’ Based on Their Last State Survey.  Our Local Senior Care Consultants also Pre-Screen every home we recommend.”
• “…CarePatrol’s local, Nationally Certified Advisors look beyond the chandeliers and fancy lobbies to monitor each community’s care history and state violations so we can recommend: The Safest Options For Your Loved One.”
• The complaint against ABCSP alleges that its claims include:
• “We provide the best choices to our clients while maintaining the highest standards for living arrangements. . . . we match our clients with the top three or four most appropriate living options based upon individual needs, custom screening and available budgets. . . .”
• “Our Care Coordinators are local and have personally viewed virtually all of the assisted living communities in your area.”

CarePatrol allegedly misrepresented that it monitors or grades the care history and violations of virtually all, or a substantial majority, of assisted living facilities (ALFs) in a consumer’s desired location, that it provides services through a network of senior care consultants located in every state, and that it monitors or grades facilities based on a review of the facilities’ latest state inspection reports.  According to the FTC complaint, in most states listed on CarePatrol’s website, the company has not monitored or graded any facilities; it does not operate through senior care consultants in every state; and in numerous instances, it does not monitor or grade facilities based on the most recent state inspection reports.

ABCSP allegedly misrepresented that its placement recommendations for ALFs and residential care homes in different geographic regions are based on the personal knowledge of its personnel or agents regarding virtually all, or a substantial majority, of the facilities in those regions.  According to the complaint, the company typically does not know which ALFs and residential care homes have contracts with its franchisees, and in numerous regions, its recommendations are not based on the personal knowledge of its personnel or agents.

Both complaints note that there are at least 39,000 ALFs and thousands of smaller, residential care homes in the United States.

Under proposed consent orders that apply for the next 20 years, CarePatrol and ABCSP are barred from making false or unsubstantiated representations about their placement services.

The Commission vote to accept the consent agreement packages containing the proposed consent orders for public comment was 5-0.  The FTC will publish a description of the consent agreement packages in the Federal Register shortly.  The agreements will be subject to public comment for 30 days, beginning today and continuing through October 17, 2012, after which the Commission will decide whether to make the proposed consent orders final.  Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.  Comments regarding CarePatrol can be submitted electronically by clicking here. Comments regarding ABCSP can be submitted electronically by clicking here.Comments in paper form should be mailed or delivered to:  Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.  The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

NOTE: The Commission issues an administrative 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 respondent has actually violated the law.  A consent order is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated.  When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.  Each violation of such an order may result in a civil penalty of up to $16,000.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.