Fine Amount: $45,000,000
Primary Violation: Unfair and Deceptive Practices - Deceptive acts in lead generation, including false government affiliation claims and misleading health insurance offers
Relevant Period: Jan-18 > Dec-24
Overview
The Federal Trade Commission (FTC) filed a complaint against MediaAlpha, Inc. and its subsidiary QuoteLab, LLC, alleging violations of Section 5(a) of the FTC Act, the Telemarketing Sales Rule (TSR), and the Government and Business Impersonation Rule through deceptive lead generation practices targeting consumers seeking health insurance.
The defendants operated websites and advertisements falsely implying government affiliation and promising low-cost comprehensive health plans, while actually harvesting personal information to sell as leads to telemarketers.
The case resolved via a stipulated order for a permanent injunction and a $45 million monetary judgment, emphasising the FTC's focus on protecting consumers from misleading marketing in the insurance sector.
MediaAlpha, Inc. and QuoteLab, LLC (collectively referred to as MediaAlpha) operate a platform that sells consumer leads, primarily in the health, property, casualty, and life insurance industries. The FTC's complaint details how Defendants used deceptive advertisements and websites to attract consumers interested in Affordable Care Act (ACA)-qualified health plans, falsely suggesting affiliations with government programs like Obamacare or state-run marketplaces.
These tactics included video ads featuring presidential clips, paid celebrity endorsements, and search engine ads promising plans as low as $1 per day or $29 per month, often highlighting fictional programs like the "Health Insurance Give Back Program."
Consumers were directed to sites such as ObamacarePlans.com and GovernmentHealthInsurance.com, where they provided sensitive personal information (e.g., contact details, health history, income) under the pretense of viewing plan quotes.
Instead, Defendants auctioned this information as leads to telemarketers and other partners, leading to unwanted robocalls, emails, and texts. The complaint notes that Defendants' partners often sold non-comprehensive products, compounding the deception and resulting in consumers facing unexpected medical costs.
Defendants generated approximately $865 million in revenue from lead sales in 2024 alone, with health-related leads forming a significant portion. The stipulated order prohibits such misrepresentations, requires monitoring of partners, mandates destruction of certain consumer data, and imposes due diligence on affiliates and demand partners to ensure compliance.
In June 2023, Defendants ran a video ad on platforms like YouTube under "@obamacareplans3088", featuring an actor holding a fake approval letter for a "FREE HEALTH INSURANCE PLAN" approved by "The Administration." The ad included a prop template with a fake ID card and "Cash Benefits" banner, misleading consumers into believing it was a government program, resulting in millions of views and clicks to Defendants' sites.
The ad claimed "4 out of 5 people who qualify & call the FREE helpline are finding Health Plans in their state," with urgent calls to action like "call immediately before it's too late."
This led to over 1 million views for one variant incorporating a paid advertorial, harvesting personal data without delivering promised plans.
In January 2023, a Google ad for Obamacare-Plans.com appeared above official HealthCare.gov results for searches like "obamacare insurance," promising "Health Plans from $1 per Day" and "Bronze Plan from $40.00/mo" during open enrollment, with claims like "Subsidy Rates Available" and "Apply Here Now!"
Similar ads targeted state-specific searches (e.g., "Connecticut open enrollment") offering "CT Plans from $30/Month" and "Save 75%," driving over 18 million clicks to sites like ObamacarePlans.com since 2018.
Consumers submitted data expecting quotes but received partner ads instead, leading to unwanted solicitations and sales of non-ACA products.
On sites like ObamacarePlans.com in January 2023, landing pages urged consumers to enter zip codes to "See Plans and Prices" with rates "as low as $1/day," displaying major carrier logos and open enrollment deadlines, implying access to ACA plans.
The submission flow solicited health conditions and income, ending with a "See Plans and Prices" button, but post-submission showed only third-party ads, not actual quotes.
This affected millions, with one Kentucky-specific ad generating over 200,000 clicks, resulting in consumers being bombarded with dozens of unwanted calls daily.
Assurance telemarketers blurred lines between STM/LBI plans and supplemental products, representing benefits like telemedicine as included at no extra cost. Consumers were charged separate monthly fees (e.g., hundreds of dollars recurring) without breakdown, leading to unauthorised enrollments.
Internal discussions noted disclosing separate costs would prompt removals; complaints showed consumers unaware of optional nature, with charges continuing post-cancellation of core plans.
In scripted videos, celebrity Floyd Mayweather promoted a "$29 per month health insurance hack" via the "Health Insurance Give Back Program," claiming it covers pre-existing conditions and dental, viewed millions of times.
Actors portrayed satisfied consumers saving "$1,274 a month," with on-screen text like "government will give you a full coverage policy for only $10/month."
This reinforced deception, leading to data collection without plan delivery, and partners selling inadequate products causing uncovered medical expenses.
Defendants continued business with a lead supplier running "Trumpcare" ads on Google and Facebook, despite internal circulation of an article highlighting the partner's deceptive practices, collecting hundreds of thousands in fees.
Affiliates used terms like "Bidencare" and "Trump Health Care Plan" per Defendants' suggestions, with emails from "Trump-Healthcare-Plans." This amplified misleading government ties, resulting in over 119 million leads sold in 2024, valued at $1.5 billion in transactions.
$33,500,000 to be paid within 7 days of order entry from escrowed funds; additional $11,500,000 within 90 days. Failure to pay the second installment triggers immediate full judgment due, plus interest.
"Defendants deceive consumers interested in health plans and other insurance products into revealing valuable personal information so it can be used for robocalls and sold to the highest bidder." (From the FTC Complaint, summarizing the core deceptive practices.)
"Defendants also know their telemarketer partners frequently do not sell consumers the low-cost, comprehensive health insurance Defendants advertise. Instead, the telemarketers compound Defendants’ deceptive claims, inducing consumers to purchase expensive products and services very different from those touted in Defendants’ ads and on their sites." (From the FTC Complaint, highlighting awareness of partner misconduct.)
"Judgment in the amount of Forty-Five Million Dollars ($45,000,000) is entered in favor of the Commission against Defendants, jointly and severally, as monetary relief." (From the Stipulated Order, detailing the financial penalty structure.)