Ark. AG Sues Company Selling Deceptive Prescription Drug Cards

Arkansas Attorney General Mike Beebe filed suit against Peoples Benefit Services Inc., a company that claims to offer discounts on prescription drugs, the AG’s office announced.

Based in Pennsylvania, Peoples Benefit has mailed at least 107,000 solicitations to Arkansas consumers, primarily seniors, since 2003, the AG’s office said.

While the company has no affiliation with Medicare or the Social Security Administration, the mailings sent by Peoples Benefit closely resemble official government documents, utilizing nearly identical logos, designs and typeface. They are marketed under official-sounding names such as “Senior Security Program”, “Senior Rx Discount Plan” and “Senior Security Supplemental Initiative.” The suit alleges that deception was used to mirror legitimate government mailings.

“These programs produce few, if any, legitimate discounts for Arkansans who sign up hoping to find help with their prescription-drug costs,” Beebe said. “This company is trying to capitalize on the complex re-working of Medicare programs in order to profit from seniors who are looking for financial assistance.”

The timing of the mailings has coincided with changes in Medicare programs over the past three years. This proved true again in October, when new solicitations from Peoples Benefit paralleled legitimate mailings regarding the new Medicare Plan D prescription-drug-benefit plans.

The company typically has charged a fee of $5.95 a month to consumers who then received a card and a list of approved pharmacies. In many cases, the pharmacists listed had never heard of the program, and did not recognize or accept the card. In the rare event that consumers received any discount at all, the discounts were minimal.

In the lawsuit, Beebe is asking for an injunction to stop the deceptive mailings in Arkansas, as well as restitution for Arkansas consumers who signed up for the programs. The state is also seeking civil penalties against Peoples Benefit under the Deceptive Trade Practices Act and the Health Related Cash Discount Card Act.

Pennsylvania, Massachusetts and Illinois also filed suits against Peoples Benefit Services.