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A Times Editorial

Leadership needed on telemarketing fraud

Among the many tricks used by telemarketers who raise money for dubious charities is to call the same people over and over. Anyone who has given before will be harangued for money again, potentially dozens of times per year, sometimes more than once in a day. Florida and Iowa are taking steps to crack down on deceptive charity soliciting, and more states should follow suit. Every effort should be made to shut down this dirty business.

A yearlong investigation by the Tampa Bay Times and the Center for Investigative Reporting shines a bright light on the unethical way telemarketers and questionable charities extract multiple donations from good-hearted people. The latest installment by reporters Kris Hundley and Kendall Taggart examined the Iowa-based activities of the telemarketing firm Associated Community Services, one of the country's largest charity fundraisers. Interviews with current and past employees as well as internal company records and recorded calls obtained through an Iowa attorney general's investigation revealed some of the deceptions the firm's telemarketers use and how donors are hit up multiple times if they are seen as an easy touch.

Often the way to get a person to donate to a cause that sounds good but isn't is to confuse or mislead them. Typical of one of Associated Community Services' Iowa charity clients was the Children's Cancer Fund of America. The charity named to exploit concerns for sick children raised $44 million nationwide since 2004. But only $2 million was given in cash aid for cancer patients and their families.

Associated Community Services would fool donors by telling them a charity's request was a one-time event when it wasn't, according to a former employee. Solicitors would also imply that 100 percent of the donation would go to the charity when the firm and its related companies would keep as much as 85 cents of every dollar donated. Most of the remainder would go to the charities' administrative costs, particularly generous executive compensation. Almost nothing went to the advertised cause.

The firm's calls were disproportionately to elderly Iowans, many of them on a fixed income. ACS claimed it didn't single out the elderly, but the Iowa attorney general found that most of the donors who gave 20 times or more were 69 or older. Now a judge has barred the group from soliciting in the state. That's how reform starts. Now states should go beyond reacting to bad actors to screening for them.

In Florida, Agriculture and Consumer Services Commissioner Adam Putnam, prompted by Hundley's and Taggart's findings that 11 of the worst 50 charities in the country reside in Florida, is expected to seek new authority from the 2014 Legislature to crack down on disingenuous charities and their telemarketers that get rich by preying on people's good intentions.

Tighter regulation, better oversight and national coordination are needed to protect generous people from getting ripped off. Florida, particularly with its large elderly population, should help lead the way.

Leadership needed on telemarketing fraud 11/22/13 [Last modified: Friday, November 22, 2013 5:37pm]
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