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July 24, 2012

Judge Issues Injunction against Arizona Telemarketer, Miller Sues Company

Miller lawsuit alleges company boosted sales through telemarketers falsely claiming to be disabled veterans

(DES MOINES, Iowa)  A Polk County judge today issued a temporary injunction against a for-profit Arizona company and its owner, barring them from engaging in a variety of misleading practices in connection with their telephone sales to Iowans. 

A consumer fraud lawsuit filed today by Attorney General Tom Miller requested the injunction, alleging that Action Point, LLC, of Phoenix, owned by Robert Foster, had repeatedly made false claims that its telemarketers are disabled veterans in order to generate sales of high-priced consumer goods, such as $50 tins of cookies.

“We allege that Action Point telemarketers misrepresented themselves as seriously injured, even paralyzed veterans of the Iraq or Viet Nam wars in order to touch Iowans’ hearts and reach deeper into their pocketbooks,” Miller said.  “Generous Iowans paid premium prices on such items as cookies, light bulbs, trash bags, and household cleaners—but evidently not to the wounded vets that people thought they were talking to,” Miller said.

The lawsuit alleges that Action Point telemarketers made a number of misleading claims in calls to Iowans, including claims that merchandise payments would be tax deductible, and that a large share of each payment would go to providing shelter credits and other vital assistance to disadvantaged vets in need.  Miller said that these false claims were caught on tape through his office’s undercover phone line, which records solicitation calls that telemarketers direct to cooperating elderly Iowans.  A December 27, 2011 recording of one of the Action Point solicitations was attached to the lawsuit.

In that recording, the solicitor claimed that “everyone that works at Action Point does have a physical disability.”  The solicitor added that “80 percent of the guys here are disabled veterans.”

According to the lawsuit, the recorded claims regarding disabilities and military injuries were directly contradicted by owner Robert Foster.  Foster allegedly acknowledged that no one involved in Action Point’s operations is disabled, and that none of the proceeds go to help the disabled.

“We allege that Action Point’s deception claimed older Iowans as its biggest victims,” Miller said.  “As we state in the lawsuit, almost all of the Iowans from whom Action Point extracted the largest amounts – sometimes through frequent repeat calls, and sometimes by getting someone to spend as much as $2,000 in a single call – were age 65 or older.”

The lawsuit asks the court to permanently prohibit Action Point and Foster from making any more deceptive calls to Iowans, and to require the company to honor refund requests, pay civil penalties, and reimburse the state’s attorney fees.

“Ruses like this make it harder for fundraising efforts that genuinely seek to benefit veterans and the disabled,” Miller said.

While this case involves a for-profit company and not a charitable organization, Miller reminds Iowans to give, but to give wisely by being aware of charity fraud.  His advice includes being leery of a sympathetic name or sales pitch, asking specific questions about how the organization spends its money, and requesting written information.

There are many excellent charities soliciting contributions in Iowa, and the Attorney General's Office is eager to stop fundraising abuses and uphold the integrity of our system of giving.

If you think you may have been cheated by a fundraising scheme, contact the Attorney General's Consumer Protection Division through the Attorney General’s website.  You can also call us at 515-281-5926, or toll-free at 888-777-4590.  Or write us at Attorney General Consumer Protection Division, Hoover Building, Des Moines, Iowa 50319.

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