FTC’s first case under opioid rules questions conduct of company that provides marketing services to treatment centers

When it comes to making the important decision to seek professional help, people struggling with addiction—as well as their families, friends, and coworkers—are looking for accurate information about the treatment that’s best for the individual. But according to the FTC’s proposed settlement, R360 LLC, which provides marketing services to addiction treatment centers, and its principal, Steven Doumar, ran national ads that used false claims to promote their clients’ facilities. .This is the first case brought by the FTC Opioid Addiction Recovery Fraud Prevention Act.

In addition to advertising on its own website and social media, Florida-based R360 has launched an extensive national television campaign for the R360 Network, a national panel of addiction recovery experts. The ad did not mention the name of a specific facility. Instead, according to the FTC, R360 promised that people who called the toll-free number would be connected to an addiction treatment expert who would perform a personalized assessment and refer the caller to the treatment center best suited for the person. But how is it possible for someone seeking help to evaluate the quality of a particular treatment center? Not to worry, R360 claims. According to their advertising, each member of the R360 network is selected by a substance abuse and addiction treatment expert. Additionally, each R360 Network member is evaluated based on rigorous objective criteria.

R360’s ads highlight the rigorous vetting process treatment centers undergo to become part of the R360 network and claim they are “carefully selected” for “ethical conduct.” R360 describes them as “the cream of the crop,” and further states that by choosing one of their affiliated facilities, “you can guarantee that the people providing personalized service are qualified.”

That’s what R360 says to members of its network, but according to complaints, there’s more and less going on behind the scenes. In order to become a member of the R360 network, treatment centers sign a contract to pay an R360 monthly or annual fee. When people respond to advertising calls, R360 routes them to one of the facilities. The treatment center will then pay R360 an additional fee for the calls it receives to respond to R360’s advertising.

According to the FTC, calls in response to R360 ads are automatically routed to paying R360 network members without an initial assessment of the person’s special needs.In other words, R360 is not asking people for that kind of information It is necessary to make an individualized determination of the treatment facility that is best for the person, for example, whether they are seeking inpatient or outpatient treatment, whether medical detox is available, whether the facility accepts Medicaid, or whether they are willing to travel to a facility that is located further away .

Additionally, the FTC stated that R360 staff responsible for signing facilities for the R360 network had no education or professional experience in the fields of substance use disorder, addiction treatment, or mental health. You’ll need to read the complaint for the details, but the FTC also claims that the vetting process for potential members of the R360 network falls far short of the “hand-selected,” “cream of the crop” system the company advertises in its statement. advertise.

The complaint alleges that R360 and its owner, Steven Doumar, violated the FTC Act. Additionally, this is the first case brought by the Federal Trade Commission (FTC). Opioid Addiction Recovery Fraud Prevention Act. The statute makes it “unlawful to engage in unfair or deceptive acts or practices with respect to any substance use disorder treatment services or substance use disorder treatment products.” The law further states that the violation “shall be deemed a violation of Section 18 of the Federal Trade Commission Act” – meaning civil penalties would apply.

In addition to injunctive provisions that would change the way the defendants do business going forward, the proposed settlement includes a $3.8 million civil penalty that is suspended due to the defendants’ inability to pay.

This case has two main messages for other businesses. firstthis Opioid Addiction Recovery Fraud Prevention Act – and Congress’ explicit inclusion of financial remedies – should demonstrate the seriousness with which the FTC takes false or misleading claims about addiction treatment products or services. The FTC will continue to closely monitor the market and take action against those who seek to profit from addiction, particularly companies that exploit the opioid crisis. second, the latest in a growing series of FTC cases challenging the illegal practices of lead generators or referral services. If you make explicit or implicit statements about selection or screening criteria, you need solid evidence to support those claims.