The FTC’s Northwest Regional Office has, for decades, led federal law enforcement efforts to investigate and shut down alleged fraud in the charity fundraising industry (state attorneys general are even more active in this space, as we’ve noted in previous writings). While the Northwest Region was somewhat active in the 1990s and early 2000s, its appetite for policing fundraising telemarketers clearly received a boost from its collaboration with state regulators against several allegedly sham charities in 2015. Just last year, we reported that enforcement against perceived charitable fundraising fraud remained a top FTC priority. With the beginning of 2018 upon us, the trend continues.
On January 10, 2018, the FTC asked the Department of Justice to file a complaint against Ohio-based charity and political fundraiser InfoCision, Inc., alleging violations of the FTC’s Telemarketing Sales Rule (for a good primer on why the FTC may refer litigation to the DOJ when it alleges violations of the TSR or other FTC trade regulation rules, click here). According to the complaint, InfoCision misrepresented the purpose of calls it placed to consumers in some of its telemarketing campaigns. The DOJ alleges that InfoCision told consumers at the beginning of the call that the purpose of the call was not to ask for a donation; however, the company’s telemarketers would then ask consumers to mail or hand-deliver materials to family, friends, or neighbors, asking for money donations to InfoCision’s charity client. In some cases, according to the DOJ, telemarketers would also ask the call recipient to make a charitable donation in contradiction of the initial representation that the purpose of the call was not to seek such a donation.