June 24, 2005                                                         Contact:Lucas Hamilton

FAKE DISCOUNT CARD SCAM ARTISTS ARE 'PUT ON NOTICE' New Law Will Protect Montanans From Fake Discount Card Fraud

      Helena, Mont., June 24, 2005 - State Auditor John Morrison announced today that a new bulletin issued by his office instructs medical discount card suppliers on how to comply with Montana's new fake discount card law. SB 380, proposed by the State Auditor's Office and passed overwhelmingly by the legislature, will give the State Auditor greater regulatory authority over the solicitation and sale of medical discount cards so that consumers in Montana are better protected from fake discount scams.
      "I have zero tolerance for scam artists who prey on Montanans," said Morrison. "This new law will help us weed out the swindlers from the legitimate players so Montanans are protected."
      Under the new law which goes into effect October 1, 2005, discount card providers will comply with the following regulations:

  • Before marketing, promoting or selling discount cards in Montana providers will register as a medical discount card supplier with the State Auditor.
  • The discount card providers will provide the State Auditor with a list of solicitors authorized to sell or distribute its products
  • The discount card providers must maintain a surety bond in the amount of $50,000 to pay for any damages caused by or fine levied against the supplier for violations.
      In addition, medical discount card and pharmacy discount card suppliers will:
  • Not mislead consumers about the discounts offered by the card, doing so will be considered fraud and a deceptive practice, resulting in fines and possible restitution to victims
  • Inform consumers that cards are not a substitute for insurance
  • Provide consumers a list of services offered by the card and contact information of providers within a 60-mile radius that honor the card, before selling the card.
  • Provide consumers with a 30-day right to cancel
  • Make available all contact information of all providers who honor the card
  • Provide their contact information to State Auditor's Office
      To enforce the new law, the State Auditor may issue cease and desist orders and fine violators up to $5,000 for each violation.
      "This law gives me the tools to go after con artists who commit fraud against our citizens," said Morrison. "And since we will have a database of legitimate providers, my office will be able to help Montanans make smart choices about medical discount cards - but people need to pick up the phone and call my office to check out an offer before moving forward."
      The bulletin can be found on the State Auditor's Office website at www.sao.mt.gov or to receive a copy by mail, call 406-444-2040. To inquire about the legitimacy of an insurance or discount card product, call the State Auditor's office toll free at 1-800-332-6148.