Information and Alerts

Government Action: BBB reports on known government actions involving business’ marketplace conduct:

United States v. Seguro Medico, LLC

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.

On May 14, 2025, the United States District Court for the Eastern District of Pennsylvania announced the unsealing of a superseding indictment charging the business and its owners with conspiracy and wire fraud offenses. According to the indictment, which was returned by a federal grand jury, the defendants allegedly engaged in a scheme from at least January 2018 through December 2022, during which tens of millions of dollars in commissions were collected by systematically deceiving consumers seeking health insurance through bait-and-switch sales tactics. Specifically, the defendants allegedly misled consumers into purchasing limited benefit plans that provided little or no coverage by falsely representing those plans as comprehensive health insurance or as equivalent to major medical insurance.

As detailed in the indictment, the defendants allegedly paid lead generators to transfer live calls with consumers searching for health insurance. According to the indictment, once transferred, employees of the defendants misrepresented the company as “the national enrollment center for health insurance” and claimed to act as a third-party broker, comparing products across the entire marketplace to identify the best coverage at the lowest rates. The indictment further states that the defendants falsely asserted they “worked with over 30 of the top A-rated insurance companies” and sold comprehensive policies from well-known, reputable insurers. However, according to the indictment, the defendants did not work with the referenced A-rated carriers and did not sell major medical insurance. Instead, the defendants allegedly marketed and sold a limited set of discount plans that offered significantly reduced benefits compared to major medical coverage, and, in some cases, the plans did not constitute insurance at all.

The indictment further charges that, as a result of the defendants’ bait-and-switch schemes, tens of thousands of consumers were left without insurance coverage for the majority of their medical, dental, and prescription costs. According to the indictment, for certain consumers with serious healthcare needs, the lack of coverage from the limited benefit plans allegedly caused financial hardship and resulted in substantial medical debt, sometimes amounting to tens or even hundreds of thousands of dollars.

Additionally, the indictment accuses the defendants of employing unlicensed sales agents to sell the limited benefit plans; bundling products to imitate major medical coverage; training employees to use misleading sales scripts; and operating under various trade names and aliases. The indictment also alleges that the defendants engaged in “churning” and “policy-flipping” by reselling and upselling to existing consumers; omitted or downplayed material restrictions in the plans; overbilled and double-billed consumers; instructed consumers to ignore verification disclaimers or disclosures; altered recorded sales calls to mislead regulators; withheld material information from their employees; ignored complaints from consumers, insurance carriers, and regulators; and refused or delayed issuing refunds to affected consumers.  If convicted, the owners of the business face maximum penalties of 600 years imprisonment, 5 years supervised release, over $5,000,000 in fines, along with restitution and forfeiture.