The average American family spends more than 10% of their household income on health insurance. It’s understandable, then, that people are eager for ways to lower those costs.

But don’t be too quick to jump on an offer for discounted medical insurance – it’s likely a scam that could cost you money.

According to a new warning from the Federal Bureau of Investigation, people across the U.S. are being targeted by scams involving misleading or fraudulent offers for medical insurance plans that promise reduced rates but don’t deliver any coverage.

The scams, the FBI warned, are costing Americans millions of dollars each year.

How the scam works

Most of the scams begin with unsolicited contact via calls, texts or emails from an unknown business offering special deals or discounted medical insurance.

Targeting people looking for more affordable coverage options, scammers use the name of legitimate insurance providers, pressure to sign up immediately and promises of limited special rates or free services to get someone to sign up for the plan.

Once someone signs up, the company either disappears or fails to provide actual insurance coverage when needed.

It’s happening across U.S.

Examples cited by the FBI show how the scam can vary:

Washington state issued a cease-and-desist order against a discount medical insurance company after more than 100 complaints about fraudulent practices. According to the FBI, the company misrepresented its plan coverage options and customers were left to pay out of pocket for procedures. Customers who tried to cancel found it almost impossible to receive a refund.

In Pennsylvania, one couple was pressured to sign up with what they thought was a national provider. After a trip to the emergency room, they learned they had no coverage and were responsible for all their medical bills. In another Pennsylvania case, an individual was promised cheaper coverage and a refund on their existing plan. Instead, the individual never received their promised refund and the new company provided no information.

A Texas customer responded to an advertisement offering aid for gasoline and groceries to senior citizens. He was told he had to sign up for a specific dental plan to obtain aid. The aid never arrived after he signed up and he ended up having to cancel his credit card to get the charges to stop.

How to protect yourself, from the FBI

• If you’re offered a medical plan, make sure it is from a reputable source, and that the company is licensed to operate in your state. The state insurance commissioner or the Better Business Bureau are good sources to verify the veracity of a plan.
• Verify with your current providers that they accept the insurance plan you are considering.
• If no policy documents are sent, this could be a sign that the offer is fraudulent. If policy documents are sent, review them and read the fine print. Understand exactly what is being offered before committing to anything.
• Don’t pay anything upfront. Be cautious if a company asks for large upfront payments or seems to be pressuring you into making quick decisions.
• Do your own research. If the plan seems too good to be true, it probably is.