(DES MOINES, Iowa) A professional fundraising company accused of consumer fraud by Iowa Attorney General Tom Miller is now under court order to cease all fundraising activities and is no longer allowed to remain in business.
On May 27, 2010, a Polk County District Court judge ordered Public Safety Communications (PSC), Incorporated, a Des Moines-based fundraising company, to cease fundraising in Iowa and to Iowans effective July 15, and to dissolve the company. “This court order now takes effect and puts professional fundraisers on notice that we’re watching for deceptive practices,” said Miller.
In May of 2009, Miller filed a consumer fraud lawsuit against PSC, accusing the company of misleading Iowans about who was soliciting, where donated funds were used, and the percentage of donations that actually went to purported charities. PSC solicited on behalf of purported charitable organizations such as Handicapped Children’s Services of America; American Veterans Network; the Association for Firefighters and Paramedics; and the State Police Officers Council, which is a non-profit labor organization.
Miller alleged that PSC typically kept 80 to 90 percent of its solicited donations, while sending only 10 to 20 percent to the purported charities. In recorded phone calls, PSC told potential Iowa donors that a much higher percentage of their donations would go to charity; deceptively claimed that donations would stay in Iowa when, in fact, in many cases they were sent out of state; and misled consumers about what collected donations would be used for.
In one fundraising call recorded in Iowa in March of 2009, PSC solicited on behalf of Handicapped Children’s Services of America. The phone solicitor claimed 80 percent of contributions benefited the charity, when in fact only 20 percent went to the purported charity. The caller also claimed, “We’re helping handicapped children here in Iowa,” when in fact the purported charity conceded it had never funded any Iowa charitable functions.
In another fundraising call recorded in Iowa in February of 2009, a PSC solicitor, who claimed to be a volunteer, told a potential donor that the individual’s entire contribution would go to the State Police Officers Council to be used for a child identification program. In his consumer fraud lawsuit, Miller alleged that, in fact, only 25 percent of the money went to the Council.
On May 27, 2010, Andy D. Constantine, as an officer of Public Safety Communications, doing business as “Public Safety, Inc.,” and “Public Safety,” signed a consent decree, which was then entered by a Polk County District Court judge. The decree enjoins the company, effective July 15, from engaging in fundraising from Iowa or fundraising directed to an Iowa resident. The decree also orders the company to dissolve and dispose of its assets. Constantine and Public Safety Communications deny wrongdoing or liability, but agreed to the consent judgment.
Miller points out that while some professional fundraisers deceptively raise money from Iowans, there are legitimate charities that raise money and help Iowans. “I want Iowans to know that there are many reputable charities deserving of your generosity,” Miller said. “Our focus is on fraudulent operators who mislead Iowans and divert much-needed money from worthy causes.”