FTC FACTS for Consumers

FOR THE CONSUMER 1-877-FTC-HELP

ftc.gov FEDERAL TRADE COMMISSION

Medical Billing Opportunities: 

Worth a Second Opinion

I f you’re looking for a home-based business that can help you pull in $20,000 to $45,000 a year using your computer, a work-at-home opportunity doing medical 

billing may sound like the perfect choice. But before you part with your money, consider 

this: The Federal Trade Commission (FTC) has brought charges against promoters of 

medical billing opportunities for misrepresenting the earnings potential of their businesses 

and for failing to provide key pre-investment information required by law.
Facts for Consumers

MEDICAL BILLING SCAMS

Ads for medical billing business 

opportunities appear on the 

Internet and in the classified 

sections of local newspapers and 

“giveaway” shopper’s guides. 

In the “Help-Wanted” classified sections, the ads 

may appear next to legitimate ads for hospital 

medical claims processors, leading consumers 

who respond to think they’re applying for a job, 

not buying a business opportunity.

The ads lure consumers with promises of 

substantial income working from home full- or 

part-time — “no experience required.” They 

direct consumers to call a toll-free number for 

more information.

If you call, a sales representative will entice 

you to sign up by telling you that the processing 

of medical claims is a lucrative business, that 

doctors are eager for help with electronic claims 

processing, and that you — even without any 

experience — can do this work from the comfort 

of your home.

Medical billing scammers charge a fee of 

hundreds, even thousands, of dollars. In 

exchange, they claim to provide everything you 

supposedly need to launch your medical billing 

business: the software program to process the 

claims and a list of potential clients.

But the reality is that few consumers who pay 

for medical billing opportunities find clients or 

make any money, let alone earn the promised 

substantial income. Competition in the medical 

billing market is fierce, especially for those who 

are new to it. Many doctors’ offices process their 

own medical claims. Doctors who contract out 

their medical billing often use established firms, 

not individuals working from home.

Promoters of fraudulent medical billing 

opportunities are not interested in helping 

consumers, either. They only want their money. 

Many times, the client lists they provide are based 

on out-of-date databases of doctors who haven’t 

asked for medical billing services. The software 

they send may not work or may not have been 

properly authorized and so is useless. And the 

money-back “guarantees” often prove worthless. 

Even after making repeated calls to the promoter 

or complaining to their credit card companies, 

government agencies or consumer groups, only a 

few people actually get refunds.

HOW TO PROTECT YOURSELF

To avoid losing your money to 

a bogus medical billing business 

opportunity, the FTC advises you 

to:

• Ask the promoter to give you the names of 

many previous purchasers so that you can 

pick and choose who to call for references. 

Make sure you get many names from which 

to choose. If the promoter provides only one 

or two names, be careful: The contacts may 

be “shills” — people hired to give favorable 

testimonials. Interview the references, 

preferably where the business operates, to 

get a better sense of how the business works. 

Ask for the names of their clients and a 

description of their operation.

• Consult with organizations for medical 

claims processors or medical billing 

businesses and with doctors in your 

community. Ask them about the medical 

billing field: How much of a need is there 

for this type of work? How much work does 

medical billing entail? What kind of training 

is required? Do they know anything about the 

promotion or promoter you’re interested in? 

• Check with the state Attorney General’s 

office, consumer protection agency and 

the Better Business Bureau in your area 

and the area where the promoter is based 

to learn whether there are any unresolved 
Facts for Consumers

complaints about the business opportunity or 

the promoter. While complaints may alert 

you to problems, the absence of complaints 

does not necessarily mean the company is 

legitimate. Unscrupulous companies may 

settle complaints, change their names or 

move to hide a history of complaints.

• If the medical billing opportunity sells 

another company’s software, check with 

the software company to find out whether 

company representatives know of any 

problems with the medical billing promoter.

• Consult an attorney, accountant or other 

business advisor before you sign any 

agreement or make any payments up front. 

An attorney can review the promoter’s 

contract and advise you on how best to 

proceed.

WHERE TO COMPLAIN

If you think you’ve been 

defrauded in a medical billing 

business opportunity scheme, 

contact the company and ask for your money 

back. Let the company representatives know that 

you plan to notify law enforcement and other 

officials about your experience. Keep a record of 

your conversations and correspondence. If you 

send documents to the company, send copies, not 

originals. Send correspondence by certified mail 

— and request a return receipt — to document 

what the company received. 

If you can’t resolve the dispute with the company, 

file a complaint with:

• the Federal Trade Commission. Call 

1-877-FTC-HELP (1-877-382-4357) or visit 

ftc.gov.

• the Attorney General’s office in your state 

or in the state where the company is located. 

The office will be able to tell you whether 

you’re protected by any state law to regulate 

work-at-home programs.

• your local consumer protection offices.

• your local Better Business Bureau.

• your local postmaster. The U.S. Postal 

Service investigates fraudulent mail 

practices.

• the advertising manager of the publication 

that ran the ad. The manager may be 

interested to learn about the problems you’ve 

had.

The FTC works for the consumer to prevent 

fraudulent, deceptive, and unfair business 

practices in the marketplace and to provide 

information to help consumers spot, stop, and 

avoid them. To file a complaint or to get free 

information on consumer issues, visit ftc.gov 

or call toll-free, 1-877-FTC-HELP (1-877-382-

4357); TTY: 1-866-653-4261. The FTC enters 

Internet, telemarketing, identity theft, and other 

fraud-related complaints into Consumer Sentinel, 

a secure, online database available to hundreds of 

civil and criminal law enforcement agencies in the 

U.S. and abroad.
Facts for Consumers

1-877-FTC-HELP FOR THE CONSUMER

FEDERAL TRADE COMMISSION ftc.gov

April 2002

Federal Trade Commission

Bureau of Consumer Protection

Offi ce of Consumer and Business Education

The Federal Trade Commission (FTC) is the nation’s consumer protection agency. Here are some tips 

from the FTC to help you be a more savvy consumer.

1. Know who you’re dealing with. Do business only with companies that clearly provide their name, 

street address, and phone number.

2. Protect your personal information. Share credit card or other personal information only when 

buying from a company you know and trust. 

3. Take your time. Resist the urge to “act now.” Most any offer that’s good today will be good 

tomorrow, too.

4. Rate the risks. Every potentially high-profit investment is a high-risk investment. That means you 

could lose your investment - all of it. 

5. Read the small print. Get all promises in writing and read all paperwork before making any 

payments or signing any contracts. Pay special attention to the small print. 

6. “Free” means free. Throw out any offer that says you have to pay to get a gift or a “free” gift. If 

something is free or a gift, you don’t have to pay for it. Period. 

7. Report fraud. If you think you’ve been a victim of fraud, report it. It’s one way to get even with 

a scam artist who cheated you. By reporting your complaint to 1-877-FTC-HELP or ftc.gov, you 

are providing important information to help law enforcement officials track down scam artists and 

stop them!