HARRISBURG – A Pennsylvania-based home health care provider has reached a $259,000 settlement with the Attorney General’s Elder Abuse Unit for defrauding elderly consumers by misrepresenting the actual service it provided to its customers.
Attorney General Tom Corbett said the agreement was reached with Homeward Bound Services, Inc., which is based in Drexel Hill, and its affiliates.
From 1999 to 2005, Homeward Bound allegedly deceived elderly Pennsylvanians into purchasing a non-medical home health care service program by marketing it as a long-term care insurance policy.
“Homeward Bound deliberately deceived elderly Pennsylvanians living on a fixed income by selling them a product they believed would keep them from entering a nursing home or assisted living facility,” Corbett said. “It is appalling to believe that a company could prey on the fears of some of our most vulnerable citizens to line its own pockets.”
Corbett said Homeward Bound allegedly used current and former insurance agents to market and sell its non-medical home care program to elderly consumers who did not qualify for or were looking for a cheaper alternative to long-term care insurance.
According to the Assurance of Voluntary Compliance, the “Assisted Living Service Agreement” promised to provide similar benefits and protections as long-term care coverage, such as meal preparation, cleaning, laundry, grooming, bathing, etc., but with easier access. However, Homeward Bound did not directly provide these services, and instead contracted with third-party providers and would only pay for services that were pre-authorized.
Corbett said Homeward Bound convinced consumers that the product was like long-term care insurance, but represented to the Commonwealth that the product was fee-for-service, creating confusion among consumers that would decrease the likelihood that they would request services.
As part of the settlement, Homeward Bound and its affiliates have been fined $249,000 for Consumer Protection Law violations. This amount will not be collected, provided Homeward Bound and its affiliates comply with the AVC; conduct no trade or commerce within or from Pennsylvania on or before Dec. 31, 2007; and surrender or withdraw all charters, certificates of authority, etc. within six months.
Corbett said Homeward Bound must also pay $10,000 for investigation costs and future public protection purposes.
The settlement was negotiated by Deputy Attorney General Timothy Gates from the Attorney General’s Health Care Section, which is part of the Elder Abuse Unit.