FTC Fines Telemarketing Fundraiser $250,000
January 22, 2018 Mark Hrywna
An Akron, Ohio-based telemarketing and fundraising firm to some of the nation’s largest charities has agreed to pay a $250,000 fine after claims that its telemarketers misled consumers by allegedly falsely saying they were not calling to ask for donations.
The Federal Trade Commission (FTC) accused InfoCision with making false or misleading statements that induce consumers to make donations, in violation of the Telemarketing Sales Rule (TSR). The settlement came on Jan. 11, a day after the Department of Justice filed charges on behalf of the FTC in U.S. District Court for the Northern District of Ohio.
To “avoid the cost and distraction of a lengthy public court dispute,” InfoCision agreed to the government’s settlement demand, Chief of Staff Steve Brubaker said. “We feel strongly the investigation had no merit whatsoever. The agency never produced a single consumer complaint or even suggested that consumers actually had been confused,” he said.
Since at least 2013, the company conducted hundreds of telemarketing calls on behalf of charitable organizations and in some of those campaigns, telemarketers told consumers at the start of the call that they were not calling to ask for a contribution. Telemarketers, however, subsequently asked consumers to mail or hand-deliver materials that requested donations to family, friends and neighbors, according to a press release from the FTC announcing the fine. Telemarketers also asked for donations ranging from $10 to $50.
The order bars InfoCision from violating the TSR, which requires telemarketers calling on behalf of a charity to explain the charity they’re calling for and if the purpose of the call is to seek a donation. It also bars the company, in connection with telemarketing activities, from making false or misleading statements designed to induce anyone to pay for goods or services or to make a charitable contribution. InfoCision is required it to disclose the name of the charity on whose behalf it is calling, that the purpose of the call is to solicit a contribution, and whether the contribution sought is a donation, monetary gift, or anything else of value.
A number of large, prominent national charities hire InfoCision among their highest compensated independent contractors. According to federal Form 990 tax returns for the Fiscal Year Ending 2016, American Heart Association compensated the company $2.5 million for telephone marketing services and ALSAC/St. Jude Children’s Research Hospital paid $5.4 million for call center services, while March of Dimes paid $2 million for telemarketing services.
The order also includes standard recordkeeping and monitoring provisions to ensure compliance with its terms, according to the FTC. The FTC also thanked the Office of the Vermont Attorney General “for its invaluable assistance in this matter” but declined to elaborate on those details.
Email and telephone messages to InfoCision seeking comment were not returned by presstime.