Pennsylvania's attorney general has filed suit against New York-based Allcare Dental & Dentures, along with three top company officials, accused of numerous violations of Pennsylvania's consumer protection and credit laws leading up to the company's sudden closure in January 2011.
Acting Attorney General Bill Ryan said the civil lawsuit was filed against Allcare Dental & Dentures, of Williamsville, New York, along with several affiliated companies.
"The sudden closure of Allcare offices across Pennsylvania and throughout the country in January has triggered a flood of complaints from hundreds of consumers who prepaid for dental services that were not delivered or were not given the proper disclosures about financing, discounts and other offers," Ryan said.
"In addition, Allcare allegedly failed to safeguard or escrow the money it received in consumer prepayments, as required by Pennsylvania's Credit Services Act and a previous settlement between the company and the Attorney General's Office," he said.
Ryan said the Attorney General's Health Care Section has received more than 800 complaints from consumers, many of whom paid $1,000 to $7,000 for dental and denture services from Allcare. Many of those consumers received third-party financing for part or all of the treatments, with the money paid in advance to Allcare.
According to the lawsuit, Allcare allegedly used high-pressure sales tactics to induce consumers to agree to expensive treatment plans. In addition, Allcare provided assistance to consumers who were in need of third-party financing, applying for credit on their behalf and by submitting credit applications via the Internet or telephone.
Law is clear
Ryan said that under Pennsylvania law, Allcare was acting as a credit services organization when it assisted consumers who needed financing for their dental care.
"The law is very clear - any money paid by consumers to a credit services organization for services that have not yet been provided must be placed in a secure bank account or a bond must be obtained to safeguard the funds," Ryan said. "Without that bond or an escrow account, credit service organizations cannot accept advance payments from consumers."
Ryan added that Allcare officials allegedly continued to accept payments, including cash, credit card charges and third-party financing, even though company officials knew or should have known that they would not be able to deliver the products or services that consumers had purchased.
Additionally, the lawsuit accuses Allcare of engaging in unfair and deceptive business practices, failing to provide consumers with required cancellation notices and violations of a previous Assurance of Voluntary Compliance (consumer protection settlement) which was reached in March 2009.
Former Allcare patients in Pennsylvania who have not yet filed complaints can call the Attorney General's Health Care Hotline at 1-877-888-4877 or submit an electronic complaint.
Non-Pennsylvania residents are encouraged to contact their state Attorney General's Office to file complaints or submit an online complaint.
