Miller and FTC Announce "Operation False Alarm"

Miller and FTC Announce "Operation False Alarm"

States and Feds Crack Down on Deceptive Fund-raising for Fire Fighter and Law Enforcement Associations.

Washington, D.C.-- Iowa Attorney General Tom Miller spoke for fifty states taking action along with the Federal Trade Commission Wednesday to crack down on alleged deceptive fund-raising tactics used by professional fund-raisers purportedly acting on behalf of law enforcement associations, fire fighters, and other public safety groups.

The officials unveiled "Operation False Alarm" at FTC headquarters in Washington.

Miller announced that his office is taking legal enforcement action against two "badge- related" fund-raising campaigns that are very active in Iowa. He said the message to professional fund-raisers or groups that misrepresent their appeals is, "States will take action if you use deception to cheat donors."

At least twenty other states launched new enforcement actions Wednesday, Miller said. The FTC announced it also was taking action in several cases.

Both Miller and Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection, emphasized that consumers need to be on guard against "badge-related" fund-raising scams that rely on the good name of public safety officers.

"Donor Beware. That's got to be the watch-word for consumers," Miller said. He said consumers need to remember that fund-raising appeals using the words "police" or "fire fighters" or "state troopers" or "sheriffs" do not necessarily mean that local law enforcement officers or fire fighters will benefit from donations.

Miller said attorneys general and other officials from at least 46 states were launching consumer public education efforts as part of "Operation False Alarm."

He said the joint state/federal operation combines enforcement with public education in order to reduce the profitability of "badge-related" schemes and open the door for legitimate fund-raising in support of public safety organizations.

"Each year, generous consumers in Iowa unwittingly give hundreds of thousands of dollars to telephone solicitors who indicate the donations will support local public safety organizations, but most of that money never reaches the causes people think they are supporting," Miller said.

"Fire fighters and law enforcement officers risk their lives every day to make our communities safer," he said. "That's why generous people want to respond when they hear an appeal mentioning public safety. But that also makes people vulnerable to deceptive solicitations. People need to be very careful when they give."

Top Tips for Safe Giving

Miller listed several tips people should remember if they receive a "badge-related" fund- raising appeal:

Ask if the caller is part of a paid, professional fund-raiser operation. If so, chances are the fund-raising company gets the lion's share of the money -- sometimes more than 90 per cent of the donated funds.
Ask exactly what percentage of your donation will go to local law enforcement groups. In most cases, only a small percentage goes to the organization, and even that money may not go to public safety organizations in your own community.
Call your local fire fighters, police or troopers and ask if they support the appeal.

"Don't stop giving," Miller said. "Just be a careful giver. Donor beware."

Miller said additional tips and brochures are available by writing to the Consumer Protection Division, Attorney General's Office, Des Moines, Iowa 50319, or calling 515-281-5926.

Iowa Enforcement Actions

Miller announced two enforcement actions naming professional fund-raising companies active in Iowa. He said The Gehl Group, based in Ft. Lauderdale, Florida, and First Americo, Inc., with offices in Kansas City and Des Moines, have agreed to enter into similar formal consent judgments and permanent injunctions to be filed in Polk County District Court in Des Moines.

The Gehl Group uses telemarketing to solicit donations for the Iowa Professional Fire Fighters Association (IPFF). First Americo, Inc., runs telephone solicitation campaigns on behalf of the Iowa State Troopers Association and Iowa Special Olympics.

Miller said his office alleged that the Gehl Group and First Americo both engaged in unfair business practices and misrepresentations, and that they failed to accurately state the percentage or amount of donations that would go to the IPFF, State Troopers Association and Iowa Special Olympics. Gehl and First Americo denied the allegations, but agreed to terms of the consent judgment:

Gehl Group and First Americo each will pay $50,000 to the State of Iowa -- $40,000 each for consumer education and litigation, and $10,000 each to the State to be used to support the "National Tape Library" in San Diego, California. Miller's office was instrumental in devising and creating the tape library, through which law enforcement agencies nationwide share undercover tapes made of questionable telemarketing solicitations.
Gehl and First Americo telemarketers will disclose at the beginning of any solicitation that they are working for professional, paid, for-profit fund-raiser companies.
Gehl and First Americo will not misrepresent the percentage or amount of proceeds to be received by an organization for which they are soliciting.
Gehl and First Americo solicitors will not misrepresent that they are employed by the organizations for which funds are being solicited.
Gehl and First Americo will not misrepresent to a person they call that he or she has previously made a donation or purchased tickets, if that is not true.
Gehl and First Americo will not bill persons or businesses for tickets or donations they did not agree to.

"These terms should resolve our problems with alleged deception," Miller said, "but consumers still will have to use their good judgment about where to make donations."

Miller said the IPFF, ISTA and Iowa Special Olympics are not named as a defendants in the legal actions, but the terms of the settlements apply to them as long as Gehl and First Americo are their fund-raisers.

"Our enforcement actions and our public education work have multiple goals," Miller said. "We are dedicated to protecting consumers, dedicated to protecting the good name of law enforcement agencies and fire fighters, and dedicated to protecting the integrity of charitable giving in Iowa."