Las Vegas Sun

March 28, 2024

State accuses telemarketer of deceptive trade practices in soliciting money for charities

Catherine Cortez Masto

Catherine Cortez Masto

Tips to avoid fraud

Tips to avoid being victimized by charity fraud can be found at www.ftc.gov/charityfraud.

Nevadans have been victimized by deceptive telemarketers claiming to be raising money for charities but keeping most of the money for themselves, the state charged in a lawsuit this week.

The state, represented by Attorney General Catherine Cortez Masto and Senior Deputy Attorney General Jo Ann Gibbs, sued Community Support Inc. (CSI) of Milwaukee in Clark County District Court.

The lawsuit, alleging deceptive trade practices, said CSI employees have regularly called Nevadans to solicit donations for charities including the American Breast Cancer Foundation Inc., American Foundation for Disabled Children, Association for Firefighters and Paramedics, Firefighters Support Foundation, Kids Wish Network, Law Enforcement Alliance of America, the Medical Support Association Inc., National Vietnam Veterans Foundation Inc., Police Officers Safety Association, Reserve Police Officers Association, United States Navy Veterans Association and United States Deputy Sheriff’s Association.

The state alleged that in seeking donations, CSI misrepresented:

• That contributions would be used for local benefit.

• The amount or percentage of donations that would be used for charitable purposes.

• That the CSI callers were members or retired members of police, firefighter or veteran occupations.

• That recipients of the calls had previously contributed to the stated cause.

• That the calls were placed from within Nevada, implying a local relationship that did not exist.

• That a substantial portion of the donation would go to programs described by the solicitor.

The state also alleged CSI misrepresented to potential Nevada donors that their real or fabricated pledges were collectible debts, made collection calls to some donors and sent collection letters to some donors.

The state said CSI is a hired fundraiser for the named charities and, under various contracts, keeps 83 percent to 92 percent of the funds raised.

The suit seeks an order barring CSI from fundraising in Nevada for any nonprofit or charitable organization and an order barring it from engaging in deceptive, misleading and unlawful practices in Nevada.

The lawsuit is part of a national effort to fight fundraising fraud that was announced May 20 by the Federal Trade Commission (FTC) and numerous states.

As part of the crackdown, CSI consented to a settlement with approximately 35 states.

The Wisconsin Attorney General said the settlement includes a consent judgment enjoining CSI from engaging in specific deceptive fundraising practices. CSI also must reimburse the states $200,000 for the costs of the investigation, the Wisconsin agency said.

Masto in May said the national effort, “Operation False Charity,” focused on fundraisers misrepresenting their affiliation with law enforcement and veterans groups.

“These are particularly egregious scams because they prey on the people’s generosity and the good will of donors,” Masto said at the time. “Charitable contributions are an important public resource, but the public must be able to trust that their donations will be used as represented.”

In May, the FTC announced 76 law enforcement actions against 32 fundraising companies, 22 nonprofits or purported nonprofits on whose behalf funds were solicited and 31 individuals.

“In these difficult economic times, Americans want to make every contribution count,” FTC Chairman Jon Leibowitz said at the time. “The good news is they’re still being generous and donating to charitable organizations, including those that support our police officers, firefighters, military families, and veterans. The bad news is that some unscrupulous operators have seized on this goodwill to make a quick buck. The actions we’re announcing today demonstrate that federal and state partners will find charity scammers and we will stop them.”

The FTC also provided information to consumers to help them avoid being victimized. The information is at the agency’s Web site.

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