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Consumer News Release

For immediate release -- Tuesday, March 16, 1999.
Contact Bob Brammer -- 515-281-6699

Miller Sues Company That Sells Medical Discount Cards

Consumer suit alleges that American Discount Services, Inc., made false claims about drug and medical discounts and targeted older Iowans.

DES MOINES--Attorney General Tom Miller filed a consumer fraud lawsuit today alleging that a Des Moines company called American Discount Services, Inc., made false promises to older Iowans in selling health discount cards. The cards were supposed to provide price breaks on items such as prescription medications and care provided by physicians, dentists, chiropractors and others.

The suit alleges the discounts were exaggerated and sometimes were not available at all. The suit also alleges American Discount Services violated the Door-to-Door Sales Act by failing to notify consumers of their right to cancel contracts -- and failing to timely honor requests when consumers did ask to cancel.

Also named as a defendant in the suit is Roland L. Huff, Sr., a director of the company.

"We allege that the company made false representations that consumers' health care providers and pharmacies would provide price breaks to persons with the discount cards," Miller said. "We allege they targeted older Iowans, induced consumers to authorize withdrawal of hundreds of dollars every year, but then failed to provide the promised price breaks." In many cases, the company provided no cards or information at all for many months, Miller said.

Miller said his office knows of eleven complainants who paid an average of $537 for the discount plans and medical claim filing services. The consumers are from throughout Iowa, and their contract amounts ranged from $250 to $1,150 -- renewable annually by automatic withdrawal.

The suit, which was filed Tuesday morning in Polk County District Court in Des Moines, asks the court to order preliminary and permanent injunctions, reimbursement to consumers, and civil penalties -- including enhanced penalties for targeting older Iowans.

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