The attorneys general of California, Illinois, Minnesota, Texas, Vermont, and Wisconsin have secured a consent agreement under which Action Direct Marketing, El Cajon, California, and its president, Robert D. Hodges, must stop conducting deceptive telephone consumer health surveys. According to Attorney General press releases
- The company claimed the surveys were to improve health care for the public, but the calls were actually a marketing tool to identify potential targets for health care providers and services.
- Using the fictitious entity “National Health Surveys,” the company misrepresented to consumers that it was conducting a national health survey to improve health care for the public. However, it was actually compiling a marketing list of consumers who indicated that they had hearing and other health problems.
- Action Direct Marketing then sold these lists of names, along with the private health information it gathered, to its professional clients, including doctors, audiologists, and chiropractors, who used the names and information to solicit consumers to purchase their professional services.
- The company stopped the practice upon being notified of the states’ investigation and concerns.
Under the terms of the settlement, Action Direct Marketing is prohibited from misrepresenting the purpose of its consumer health surveys. It is also required to affirmatively disclose all potential uses of consumer health information gathered in a health survey and, specifically, to disclose that such information may be shared with health care providers or services for marketing purposes.
The company and Hodges must pay $25,000 in civil penalties to each of the six states.
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This article was posted on August 23, 1999.
