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Statement: Massive charity telemarketing scam shut down

Operation accused of raising $110 million from 1.3 billion mostly illegal robocalls
For immediate release

WASHINGTON --The U.S. Federal Trade Commission (FTC) and authorities in 38 states and the District of Columbia said Thursday that they have shut down a huge telemarketing outfit that called 67 million consumers a total of 1.3 billion times over several years, supposedly to raise money for charities. The scheme fraudulently raised more than $110 million on behalf of sham charities supposedly representing causes such as homeless veterans and cancer patients.

The company, Associated Community Services (ACS) of Michigan, several sister companies and related defendants agreed to settle after facing charges that they scammed consumers into donating money that didn’t go where it was supposed to. The defendants knew up front they were “duping” consumers, the FTC said. The defendants’ false or misleading fundraising claims violate Section 5 of the Federal Trade Commission Act and the Telemarketing Sales Rule and state laws prohibiting deceptive and unfair trade practices, the complaint says. Back in 2015, ACS and its sister companies were sued for their roles as the primary fundraisers for what the FTC called several “sham charities” operated by one family, with the majority of donations being used for the the principles’ personal expenses including vehicles, luxury cruises, tickets to concerts and sporting events, college tuition and dating website subscriptions. The charities were dissolved.

The new settlement, pending court approval, would permanently bar ACS and the other main defendants from any kind of fundraising or telemarketing. The FTC also will try to recover as much of the $110 million as possible and give the money to legitimate charities. ACS and its sister companies Central Processing Services and Community Services Appeal solicited contributions from at least 2008 until September 2019.

In response, Teresa Murray, U.S. PIRG Education Fund Consumer Watchdog, issued the following statement:

“I can’t think of too many things worse than saying you’re raising money for a charity when you’re really not.” 

“It’s clear that regulators are finally taking bigger swings at companies making illegal robocalls, which are the number one problem that consumers report to the Federal Communications Commission. It looks like the FTC caught a big player in the fraudulent fundraising arena, and that’s great.”

“This also serves as a good reminder for consumers and businesses to check out charities before they generously give. The FTC has some great advice at https://ftc.gov/charity. In this case, the FTC said the defendants knew the charities they were fundraising for were fictitious or weren’t spending the money as promised.”

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