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Buyer Beware: Insurance-Based Websites May Just Want to Sell Your Data

Many people are under the impression that any site on the internet where they can request quotes is a site owned and operated by a professional insurance agent or agency that is duly licensed in their state or jurisdiction. Unfortunately, this is not the case. In fact, a large percentage of sites relating to health insurance are neither owned nor operated by any licensed agent or agency.

In fact, many health insurance sites are mere shell-sites, or portals, designed for one main reason: To obtain personal information from the user and then sell that information to a third-party. There are numerous issues with this approach -- we'll address just a few due to space limitations.

First, there is the issue of misleading the consumer. To the best of our knowledge, little legal has been brought against these sites, but perhaps that will change in the future. Often, the consumer is not informed that their personal info will be relayed to a third-party until after they have submitted the information. This is inherently misleading. Consumers should be advised up front exactly who will be receiving the sensitive information they are providing.

Moreover, the third-parties who receive the personalized information (usually by paying a fee) are not always licensed insurance agents, but even if they are, there is no guarantee that they represent "top of the line" carriers, etc. In fact, some of the shell sites actually are operated by insurance marketing firms whose carriers have received hefty fines for misleading marketing tactics, and in some cases, they have been issued "cease & desist" orders by regulatory authorities.

How can you tell whether the site you are visiting is a legitimate one? (By legitimate, we mean that the only individuals receiving your personalized data are the licensed insurance agents or agency who actually own and operate the site.) One of the easiest ways is to take the time to click on a link called "about us" or something to that effect. Usually, if there is a licensed agent or agency involved, they will clearly inform you of such right up front (because they are doing business above board and want you to feel comfortable doing business with them). If the "about us" (or similar) page has vague details about how the company helps promote lower health care costs, etc., but is void of any specific information, well then certainly that is a huge red flag. There also should be a direct contact phone number and specific street address if you are dealing with a legitimate insurance agency (usually found on a "contact us" type of link).

What happens when you submit personal info to a site that is only trying to sell your info to a third-party? You may never know! But in most cases, your info will be sold, and perhaps re-sold, to numerous insurance agents. In many cases, you may start receiving numberous phone calls within 10 to 20 minutes of hitting the "submit" form (we have heard of people complaining of being contacted by as many as 30 different agents).

How can you protect yourself? Take a few moments to research exactly who it is owns and operates the site you are visiting. If you do not easily find specific contact information, then in all likelihood, you are on a site that is not owned or operated by a licensed agent or agency.

appy shopping. Let me know if I can help you.

C. Dean Richard, JD, MSBA
"the HSA king"™
Independent Licensed Agent/Broker since 1980