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May 8, 2013

Judge Bars Michigan Fundraiser from Calling Iowans Until it Complies with Iowa Subpoena

Associated Community Services refuses to comply with AG subpoena

(DES MOINES, Iowa)  A Polk County judge Tuesday barred a Michigan-based professional fundraiser from making any solicitations for donations in Iowa until the company complies with an investigative subpoena issued by Attorney General Tom Miller.

District Court Judge Douglas F. Staskal ruled that Associated Community Services Inc. “has refused to provide a representative to answer the State’s questions,” after the attorney general’s Consumer Protection Division demanded to question an Associated Community Services (ACS) representative under oath about its response to a previous consumer fraud subpoena regarding missing evidence of recorded solicitation calls.

“We found it curious that, after months of fighting over whether they had to produce recordings of phone solicitations, the company claimed that the recordings had ceased to exist,” Miller said.  “Then the company came up with recordings after all, but they were suspiciously incomplete.  We issued a subpoena to put a company representative under oath to account for the missing recordings, and the company refused to comply.  So we took it to a judge, and the judge rightly sent a strong message to the company by stopping it in its tracks.”

The ruling capped a series of run-ins between ACS and Miller’s office.

In August of 2010, the Consumer Protection Division filed a consumer fraud lawsuit against ACS alleging that its telemarketers tried to mislead Iowans in solicitation calls recorded by a Consumer Protection Division undercover phone line.  The lawsuit alleged, among other things, that ACS misled Iowans about the fact that only 20% of each donation was actually passed along to the charity.   The case was resolved when a judge ordered the company to change its marketing practices, comply with Iowa’s consumer fraud laws, and pay $35,000 to the state’s consumer fraud enforcement fund.

In October 2011 Miller’s office went back to court to enforce investigative subpoenas issued to ACS prompted in part by two complaints regarding telephone solicitations ACS had made to elderly Iowans.  In March of 2012 the court ordered ACS to comply with those subpoenas by producing evidence to the Consumer Protection Division, including recordings ACS had made of its own solicitation calls.

Tuesday’s ruling ordered ACS to produce a representative to account for the missing recordings, and prohibited the company from any further fundraising of any kind in Iowa until it complies with the subpoena.

“ACS has made it clear to us that they will continue to disregard our subpoena,” Miller said.  “That means that they are forever barred from calling into Iowa, which is a great development for Iowans who might have been victimized by their deceptive calls.”

In Iowa, ACS has solicited funds on behalf of several organizations, including:

  • “Vietnam Veterans of Iowa Inc.”
  • “Cancer Fund of America Inc.”
  • “Children’s Cancer Fund of America Inc.”
  • “The Breast Cancer Society Inc.”

ACS had been the target of law enforcement actions in other states, including Ohio, Missouri, Connecticut, South Carolina, and Oregon.

“This operation exhibits a scofflaw mentality, which is something our office and Iowa courts will not tolerate,” Miller added.


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