Tuesday, March 4, 2014

A Slap On The Hand For Michigan Telemarketer

The Southfield Michigan ­based charity telemarketing firm Associated Community Services, which has come under fire in several states, has reached a settlement with the Michigan Attorney General’s Office to pay $45,000 for misleading senior citizens it called to solicit donations.

ACS was accused of 430 violations.

According to Attorney General Bill Schuette, telemarketers told would ­be donors that the company was
on file with the AG’s Office in an effort to allay any fears about handing over their credit card information.

Being “on file” simply means the company is licensed to raise funds for charities. It’s not an endorsement of the firm’s credit card security system.

“Any telemarketer that tries to trick our Greatest Generation with deceptive tactics must face the
consequences,” Schuette said in a statement Thursday. “Michigan law requires honesty of our
professional fund­raisers. We will not tolerate those that abuse the name of this office to deceive donors.”

In an e­mailed statement, ACS said it “is pleased to have reached a settlement and looks forward to the
spirit of cooperation expressed in the terms of the agreement. However, the Attorney General’s office is
misrepresenting the central issue. This was never about senior citizens. ACS does not and never has
targeted any specific segment of the population through its marketing campaigns. Moreover, we have a
system of checks and balances in place to ensure that all donors are followed up with to confirm their
desire to pledge.”

ACS also allegedly violated the state’s Charitable Organizations and Solicitations Act by failing to provide copies of all soliciting materials the AG’s Office requested, submitting a document to the AG’s Office that contains a materially false statement and using a false, deceptive, or misleading pretense or
representation to get money from a person.

The AG’s Office began investigating ACS after getting a tip from a former ACS employee in January 2013 about an alleged telemarketing script the firm used. ACS has 900 to 1,000 employees, 65% of whom are callers, company president and owner Richard Cole said in an interview with the Free Press in November.

Callers, who are trained for three weeks, make $500 to $600 a week, plus incentives.

As of November, ACS had 40 clients, six of whom were based in Michigan. The 15­year­old charity
telemarketing company retained, on average, 80% of the money it solicited, 75% for corporate expenses
and 5% profit.

The company would not release its annual sales, instead telling the Free Press it wasn’t profitable in
2012 due to “the high costs associated with donor engagement, and another challenging year

economically for many American

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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