Florida substance abuse center agrees to $1.9M settlement with FTC over deceptive advertising
A drug addiction and rehabilitation clinic in Florida has agreed to pay $1.9 million to resolve a legal complaint filed by the Federal Trade Commission (FTC) that accused the for-profit company of deceptive marketing.
Evoke Wellness was accused of using Google ads and direct telemarketing to find customers, with the company’s agents allegedly masquerading as substance abuse treatment providers to sign people up for care to mitigate serious addictions to opiates, alcohol, and other drugs.
As part of the settlement, which still needs to be approved by a judge, Evoke admits to no wrongdoing. However, it has also agreed to improve its internal operations to ensure compliance with federal law. Two executives at the company are named in the initial complaint, both of whom are now responsible for part of the $1.9 million fine.
Evoke provides treatment for drug and alcohol use disorders, including medically supervised detox, acute detox, and outpatient treatment. Through its management services company, Evoke Health Care Management, the center is affiliated with six other clinics in Ohio, Massachusetts, Florida, and Texas.
According to a January legal filing from the FTC, Evoke, through its affiliated managed services arm Evoke Health Care Management, coordinates addiction-related healthcare for six clinics in multiple states. The company, according to regulators, would use the names of these clinics in ads to add legitimacy, despite Evoke being the source of posts on Google and cold calls to would-be patients.
In the lawsuit, James Hull and Jonathan Moseley, two leaders of Evoke, were named as largely responsible for these ads, although agents working for the company were ultimately responsible for any false claims.
However, the FTC contends the ads would contain contact information for Evoke directly, even when named clinics were the supposed source of the outreach. Further, the ads would suggest Evoke’s phone number was a treatment hotline when it was, in reality, a marketing call center.
FTC identifies tens of thousands of illegal ads.
This fraud allegedly happened 68,500 times, generating about 3,500 calls to Evoke employees. Further, the FTC claims the company would only reveal it’s not an actual treatment clinic when potential customers lacked suitable insurance or money to pay cash for services.
The FTC said these practices violate the Opioid Addiction Recovery Fraud Prevention Act, which forbids deceptive marketing and empowers the government to seek civil penalties. The agency was seeking $7 million, but settled on $1.9 million due to the inability of the defendants to pay more.
“Opioids have ravaged American communities, killing well over one hundred Americans per day and ruining the lives of countless others,” FTC Chairman Andrew Ferguson said in a statement. “Today’s settlement helps consumers affected by opioid addiction navigate their path to recovery by preventing fraudsters from leading them astray.”
The FTC has notably been crippled by layoffs and resignations recently, which have halted major litigation against pharmacy benefit managers (PBMs). However, its three acting commissioners voted unanimously in favor of the judgment against Evoke.
Neither the company nor Hull and Moseley admit to wrongdoing.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.