Undercover recordings led to injunction against Courtesy Health Watch Inc.
(DES MOINES, Iowa) A Polk County judge last week barred a Florida-based professional fundraiser from soliciting donations from Iowans on behalf of non-profit organizations.
District Judge Michael D. Huppert entered an injunction barring Courtesy Health Watch Inc. (“CHW”), a for-profit company headquartered in Fort Lauderdale, with call centers in Pennsylvania and Wisconsin.
The injunction is part of a consent judgment resolving a consumer fraud lawsuit Attorney General Tom Miller filed last year against the company.
“Like many of our enforcement actions against fundraising operations, this began when the company called what it thought was the name of an elderly Iowan,” Miller said. “But the call went to our Consumer Protection Division’s undercover phone line, and we recorded the solicitors’ deceptive claims.”
The lawsuit alleged that CHW solicitations included several deceptions:
- Trying to prompt higher donations by falsely claiming to a would-be donor that other consumers typically donate more than $20;
- Obscuring or exaggerating how much of each donation goes to the worthy cause or is routed to the consumer's own community;
- Implying that the caller is directly associated with the charity, rather than a telemarketer for a fundraising company;
- Falsely claiming that donations were requested only once a year.
Lawsuit: Donations Led to More Calls
“The way it worked, making a donation to one of CHW's charity clients resulted in a series of calls on behalf of its other clients,” Miller said. “Solicitors assured consumers that making a donation would end the solicitations, but it actually led to more.”
CHW Solicitors Repeatedly Targeted 82-Year-Old Iowan
Older Iowans are most affected by these practices, according to Miller. The lawsuit described the situation of an 82-year-old Keokuk woman who had received repeated calls from CHW representatives on behalf of numerous charity clients. “This woman was getting calls from CHW solicitors about once a month over a three year period,” Miller said. “Misleading phone solicitations are bad enough, but it’s worse when repeat calls amount to a virtual feeding frenzy, draining the resources of Iowans whose advanced age may make them vulnerable.”
Miller Added Three Principals to Lawsuit, Court Order Bars Future Misleading Soliciting
The August 2012 lawsuit named only CHW as the defendant. However, CHW later joined Xentel Inc. and other affiliated companies in filing for bankruptcy protection in Delaware in April 2013. Miller then added three individuals who had directed CHW’s operations to the Iowa lawsuit as defendants: Matt McFall, company president; Wayne Loring, corporate secretary; and Charlie Jankins, a supervisor with responsibility for solicitation activity in Iowa.
Today’s consent judgment contains injunctive terms that apply specifically to these individuals, prohibiting them from participating in misleading conduct directed to Iowans by other fundraising operations.
The lawsuit did not allege that any of the individual defendants had personally made the offending telephone calls, and identified other CHW employees as the callers. All defendants denied wrongdoing in the consent judgment.
Lawsuit: CHW Non-Profits Guaranteed Only as Little as 10 Percent of Donations
The lawsuit identified the non-profits in whose names CHW solicited donations as National Cancer Coalition, Childrens Leukemia Research Association, Childhood Cancer Research Coalition, Miracle Flight for Kids, National Wheelchair Basketball, Organ Donation and Transplant Association, and Breast Cancer Relief Foundation, a program of Cancer Center for Detection and Prevention Inc.
The lawsuit indicated that the fundraising contracts typically provided that the charity would receive at least 10 to 15 percent of the money donated, and that the actual amount received had not exceeded 30 percent for any of the charities.
Tips for avoiding charity fraud and making the most of your donations:
- Ask questions. Be wary of claims that the caller is a charity worker or volunteer, that most of your donation goes to the cause, or that your donation will be used locally.
- Don’t let a sympathetic charity name fool you – some fundraisers exaggerate or fabricate their support for veterans or military families, law enforcement, firefighters, victims of disease, and children’s causes.
- Ask phone solicitors to send written information. Be suspicious if they insist on a pledge before they’ll send you information. Check them out at the national Better Business Bureau “wise giving” site – www.give.org.
- Don't give your credit card or checking account numbers over the phone to someone you don't know.
- Give directly to a known charity of your choice.
- Bottom line: Give generously, but give wisely. Giving to a known charity you’re confident about is often the best option.
If you think you have been cheated by a fundraising scheme, contact the Attorney General's Consumer Protection Division:
Phone: 515-281-5926, or 888-777-4590 (outside of the Des Moines metro area)
Mail: Hoover Building, Des Moines, Iowa 50319