Attorney General targets deceptive charity pitches

By Rod Boshart

Des Moines Bureau

DES MOINES – Iowa Attorney General Tom Miller warned Iowans Wednesday to be wary of deceptive “look-alike” solicitors seeking charitable contributions that may only trickle a small share to legitimate purposes.

Miller filed a consumer fraud lawsuit alleging Public Safety Communications Inc. of Des Moines recently collected more than $1.5 million but forwarded only 10 percent or 20 percent on the charitable donations raised to client organizations.

The Iowa attorney general said telemarketing callers for the professional fundraising company were misleading Iowans about who the callers were, where donated funds were used, and how much of each dollar was going to the purported cause. Public Safety Communications raised donations for Handicapped Children's Services of America, the State Police Officers Council, American Veterans Network, and the Association of Firefighters and Paramedics.

“Given that the purported charitable organizations only receive a small percentage of the funds donated and given that those organizations report that they only commit 3 or 4 percent of their revenues to the charitable purpose, that means sometimes less than a penny on the dollar of Iowans' donations ends up devoted to the charitable purposes touted by callers,” he said. “And, the chances are high that penny isn't even spent in Iowa.”

In the lawsuit, the attorney general's office sought a court order barring Public Safety Communications from engaging in “deceptive, misleading, omissive and unfair practices” alleged in the suit. State officials sought civil penalties of up to $40,000 per violation of Iowa's consumer fraud act and up to $5,000 per violation of the law against older Iowans.

Sheri McMichael, executive director of Variety – The Children's Charity of Iowa, said such deceptive fundraising scams “make me very angry” because they undermine efforts by legitimate charities to raise money for worthy causes.

Also Wednesday, Iowa joined the Federal Trade Commissions and dozens of other states in “Operation False Charity” in launching legal and regulatory action against solicitors who allegedly tricked consumers into giving by claiming they were affiliated with law enforcement or veterans groups.

Polk County District Judge Don Nickerson issued a consent agreement Wednesday ordering Community Support Inc. of Milwaukee, Wis., prohibiting the company from making charitable fundraising misrepresentations of any kind and ordering CSI to pay $200,000 to Iowa and other states settling with the company.

Miller offered charitable donors the following tips: don't be fooled by a sympathetic name or sales pitch; ask questions about exactly how and where the contributions will be used; ask phone solicitors to send written information; don't give credit card or checking account numbers over the phone to someone you don't know; and give directly to a known charity of your choice.