FTC cracks down on companies promising due diligence
One of the first things I do when I’m about to purchase a product or service is check the Internet for information.
I’m particularly interested in getting help from companies that make my research easier by rating a product or company.
But recent action by the Federal Trade Commission is yet another reminder of the dangers of relying on information you find on the Web.
The FTC has cracked down on two companies that claim to have done extensive research on long-term care facilities. The companies offered recommendations to consumers based on their alleged legwork, including uncovering any citations or violations the facilities have received. The companies, CarePatrol and ABCSP, charge a fee to the facilities, the FTC said.
CarePatrol and ABCSP agreed to settle charges from the FTC that they misled consumers on how much work they had done in monitoring and grading the assisted-living facilities.
CarePatrol and ABCSP, which does business as “Always Best Care,” operate through a network of franchisees across the country.
The FTC alleges that CarePatrol advertised that its “senior care consultants” offer consumers placement based on its extensive research. The company’s promotional materials contained promises that said, among other claims, that “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.”
CarePatrol also said that it doesn’t just send people a list of facilities but grades each one that it recommends.
The FTC said that ABCSP made similar statements regarding its referral service, claiming it too had evaluated most every facility in its markets, going as far as to say that its “care coordinators” had personally viewed virtually all of the assisted-living communities in certain areas.
The claims by both companies would make them impressive referral services, given that there are at least 39,000 assisted-living facilities and thousands of smaller, residential care homes in the United States.
However, the FTC said that the companies failed to provide all the promised services. In most states listed on CarePatrol’s Web site, the company hadn’t monitored any facilities and doesn’t operate through senior care consultants in every state as it advertised. And ABCSP recommendations are not based on the personal knowledge of its personnel or agents.
“Companies that claim to know which facilities to recommend to consumers need to be able to back up their claims,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection.
The settlement does not mean that the companies admitted guilt. Efforts to reach ABCSP were unsuccessful.
“No clients were given information from us regarding any facility that we didn’t actually walk into, assess or check into their violations,” said Chuck Bongiovanni, CarePatrol’s founder and chief executive.
Bongiovanni said he made the mistake of listing states on his Web site in which his company did not have people to check on facilities. He said states were listed to optimize the ability of consumers to find his service.
“No client was in any way harmed,” Bongiovanni said. “I’m happy the FTC is looking into our industry. Our industry needs it. This certain situation with us was more about semantics than anything else.”
Under proposed consent orders, the two firms are barred from making unsubstantiated representations about their placement services. The FTC says this action is its first case involving companies that offer placement assistance for long-term care facilities.
Before issuing a final order, the FTC is seeking public comment until Oct. 17 on the proposed settlement. If you have had any dealings with the two companies or have an opinion about the settlement, contact the FTC. You can send your comments electronically or by mail. You will find information about submitting comments about CarePatrol at https://ftcpublic.commentworks.com/ftc/carepatrolconsent . For ABCSP, go to https://ftcpublic.commentworks.com/ftc/abcspconsent. Your mailed comments should be sent to the FTC, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Ave. NW, Washington, D.C. 20580.
For many, it can be a hard decision financially and emotionally to place someone in an assisted-living facility. So I’m glad that the FTC is looking into companies that promise a good referral service to help people narrow down their choices.
David R. Spiegel, senior trial attorney for the FTC’s Bureau of Consumer Protection, said the actions involving the two companies are part of the agency’s broader efforts to focus on seniors.
“We are checking services that give information to seniors,” said Spiegel, who cautioned people to do their own due diligence. “Don’t take information you get as gospel.”
It’s unfortunate, but Spiegel is right. You have to do checks on the checkers.
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