Trust, but verify your product providers

How do you protect your clients — and yourself — from sham companies? FOIR provides the following tips:

• Beware of health plans that require consumers to join trade associations, unions, or affinity groups to become eligible to buy coverage. Many such “multiple employer welfare arrangements” are legitimate, but not all.
• Be dubious of guaranteed-return, get-rich-quick investment schemes. Many of these offers promote unregistered communications equipment, real estate and land-development programs. If it sounds too good to be true, it is.
• Make sure to document the full name of the product provider. Then search for this name on all relevant regulator websites. If the site’s search function returns companies with similar, but not exact, spellings, don’t assume you have a match. Many scammers use variations of licensed provider names to enhance their credibility.
• Research the websites to determine the different levels of authority granted by regulators. Make sure the company has the right authority for the type of product it wishes to sell.
• If a company isn’t listed on the website, but it insists it does have authority, call the regulator to double check.
• Companies often lose the right to operate in a given state. So periodically verify your carriers authority to prevent future problems.
• Finally, if you’re the target of an unlicensed pitch, notify your state regulators. They will want to issue a cease-and-desist order to the company.

For more from Harry Lew, see:

• 10 tips to prevent an E&O claim
• Caveat Emptor: 14 ways to check out your vendors
• Infographic: The 10 warning signs of dementia