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Accused seller of ‘sham’ insurance paid for consumer refunds

A Tampa-based health insurance distributor accused by the Federal Trade Commission of misleading consumers into buying “sham” health insurance plans has filed for Chapter 11 bankruptcy protection.

Benefytt Technologies, which has offices in Fort Lauderdale and Sunrise, last year settled a Federal Trade Commission complaint that it participated in “deceptive, unfair and abusive acts” in connection with the sale and marketing of its memberships and related health products, including short-term medical plans, limited benefit plans and medical discount plans.

According to the FTC, the company targeted customers searching for insurance that complied with the Affordable Care Act. In agreeing to the settlement, Benefytt agreed to pay $100 million to refund consumers but neither admitted nor denied the allegations.

That $100 million payment, combined with $27.5 million the company paid to settle a class-action lawsuit over related allegations and $11 million paid to settle claims by the Securities and Exchange Commission,

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