Dive Brief:
- A Florida-based substance use disorder clinic has agreed to pay $1.9 million to settle allegations that it used misleading online ads and telemarketing to pretend to be other treatment providers, according to the Federal Trade Commission.
- Under the settlement, Evoke Wellness and two executives have agreed to stop masquerading as other clinics and other deceptive advertising, and to increase their compliance protocols — including punishing any agents that continue misrepresenting their business.
- A federal judge needs to approve the order before it goes into effect. Evoke did not respond to a request for comment.
Dive Insight:
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 the FTC’s complaint from January, Evoke and two executives — Jonathan Moseley, Evoke’s chief information officer and Evoke HCM’s CEO; and James Hull, Evoke’s chief marketing officer and VP of digital marketing for Evoke HCM — used the names of other clinics as keywords on their own sites to impersonate those clinics in Evoke’s Google ads. The company also displayed the names of those other clinics in their own advertising.
Those ads were paired with a phone number for Evoke. And when potential clients called, Evoke’s telemarketers poised as a centralized admissions office or addiction treatment hotline, rather than a call center specifically for Evoke, the complaint alleges.
Between 2021 and 2023, Evoke disseminated at least 68,500 misleading ads that generated at least 3,500 calls to Evoke’s call center, according to the FTC. Oftentimes, Evoke’s representatives only revealed to callers that it wasn’t the treatment center they were looking for if the customer didn’t have private insurance or wasn’t willing to pay out of pocket.
An example of an Evoke ad on Google Search wherein the company masquerades as another provider, cited in the FTC’s January complaint.
These practices violated federal law, including the FTC Act and the Opioid Addiction Recovery Fraud Prevention Act of 2018, which authorizes regulators to seek civil penalties for deceptive acts in respect to substance use disorder treatments.
The proposed order includes a civil penalty of $7 million. However, the FTC partially suspended the penalty to $1.9 million because Evoke, Mosely and Hull are not able to pay more.
The defendants could still be on the hook for the full amount if the FTC discovers they misrepresented their finances.
“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 Tuesday. “Today’s settlement helps consumers affected by opioid addiction navigate their path to recovery by preventing fraudsters from leading them astray.”
Many people who need help overcoming an addiction say difficulty finding a healthcare provider is a barrier to their recovery. According to the most recent government data, only one-forth of Americans with a substance use disorder received treatment for the condition in 2023.
The FTC has brought several actions in the past few years cracking down on deceptive business practices in the substance use disorder treatment industry, including against Florida-based treatment network R360 for nudging patients toward potentially unqualified treatment centers, telehealth company Cerebral for misleading consumers about its cancellation policies and alcohol addiction treatment provider Monument for disclosing users’ personal health information to advertisers.
FTC commissioners voted 3-0 in favor of the final order against Evoke. The agency is currently down two commissioners after President Donald Trump fired the two Democrat-appointed members in March. Both have challenged their dismissal, which has hamstrung certain agency actions, in court.
It’s been a rough week for Evoke. An employee at the company’s Ohio center is currently facing charges after police say he stole the identities of hundreds of patients and sold it on the dark web, according to media reports.
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