DES MOINES, Iowa (Legal Newsline) - Iowa Attorney General Tom Miller announced a settlement on Thursday with a Michigan-based professional fundraiser accused of violating Iowa's Consumer Fraud Act.
Associated Community Services of Southfield, Mich., agreed to change its marketing practices, to pay $35,000 to the state's consumer fraud enforcement fund and to comply with Iowa's consumer fraud laws.
Under terms of the settlement, Associated Community will refrain from stating or implying that its paid telephone solicitors are members, employees or volunteers of the charitable organization for which it is soliciting funds.
Associated Community must also abstain from misrepresenting its location or falsely claiming that a donation will provide a benefit to the consumer's own region, community or state. The company is also barred from implying or stating that a substantial portion of the donation will go to the charity when, in fact, less than 50 percent of the solicited funds will actually be donated.
Some of Associated Community's phone solicitations to Iowans will be recorded and preserved to train its employees on compliance with Iowa's Consumer Fraud Act and the terms of the settlement. The company must also ensure that employee bonuses based on donations generated are contingent on compliance with Iowa law.
"When someone calls Iowans claiming they're raising money for a worthy cause, I want them to know who is calling and where their donation is going," Miller said. :If would-be donors ask, as they should, how much money actually goes to the charitable purpose, they should get an honest answer. This consent judgment ensures that these solicitors will be straightforward about who they are, why they're calling and how donations are spent."
Since 2008, at least five other states have made allegations that Associated Community failed to comply with the consumer laws and regulations of their respective states or that the company's omissions or conduct lead to deceptive or misleading practices.
Associated Community Services, in agreeing to the settlement, denied liability or wrongdoing of any kind.