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May 24, 2013

Judge Orders Arizona Company to Stop Solicitation Claims that its Fundraising Benefits Disabled Workers

Undercover state consumer protection line records "Fresh Start" telemarketers making false fundraising claims, according to Attorney General Tom Miller

(DES MOINES, Iowa)  A Polk County judge Thursday ordered an Arizona company to stop telephone sales pitches to Iowans involving sales of high-priced household products that the company claimed would help disabled workers.

District Court Judge Rebecca Goodgame Ebinger ordered Fresh Start Handicapped Workers Inc. and its owners, Paul F. Giza and Martha C. Giza, of Peoria, Arizona, to cease all Iowa solicitations involving “express or implied representations that sales or donations benefit the handicapped, disabled, or disadvantaged.”

The consent judgment ended an investigation that began in October of 2012 when a Consumer Protection Division undercover phone line recorded two calls over several months from a Fresh Start telemarketer.  In both recorded calls, the solicitors claimed they were “handicapped” and also claimed that by purchasing Fresh Start’s light bulbs and other household items priced far above market value, the consumer was helping disabled workers.

According to Attorney General Tom Miller, the recorded calls included several false or misleading claims:

  • That 85% of each purchase “goes to [the] handicapped.”  In fact, Fresh Start is a for-profit operation, and not all of its employees are even claimed to have a “disadvantage” (such as substance abuse or prior incarceration), let alone a “handicap.”
  • That Fresh Start has offices all over the U.S., including in Iowa.
  • That sales calls are only made once a year, when in fact an Iowan who is persuaded to make a purchase is called again five months later.
  • An attempt to pressure the Iowan to buy with the false claim that if the recipient of the call doesn’t send money, “then I don’t get paid.”

Miller noted that when his office issued a fact-finding subpoena to test the truth of the recorded sales pitches, the company’s response raised additional questions.  “It’s a bad sign when an organization supposedly focused on helping disabled workers responds to a subpoena by explaining that one of its telemarketers is ‘skitsofrantic,’” Miller said.  “A response like that is a bright red flag.”

In addition to barring future Iowa solicitations, the consent judgment requires Fresh Start to pay $10,000 to a state consumer protection enforcement fund, and to make refunds to Iowans who request them.  As part of the consent judgment, the defendants denied wrongdoing.

“This is the latest example of why telemarketers with deceptive pitches should steer clear of Iowa,” Miller said.  “Their next call may be to our undercover line, putting them on the wrong end of a consumer fraud lawsuit.”

Older Iowans are frequent targets of deceptive telemarketers.

  • Don’t be fooled by a sympathetic name.  Some operations use names that promise more than they deliver.  Many causes clearly deserve generous public support, including veterans, law enforcement, firefighters, and disabled workers, but some marginal operations claim connections with such groups yet provide them with very little support.  Don’t be pressured into helping out until you have checked out a worthy-sounding organization.
  • 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.
  • Ask phone solicitors to send written information.  Check out the charity before you make a decision.  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 –
  • Don't give your credit card or checking account numbers over the phone to someone you don't know.
  • Give wisely!  Giving to a known charity you’re confident about is often the best option.

The National Consumers League warning signs that an older person may be a fraud victim:
If an older person is:

  • receiving lots of junk mail for contests, “free” trips, prizes and sweepstakes,
  • getting frequent calls from strangers offering valuable awards or great moneymaking opportunities, or asking for charitable contributions,
  • making repeated and/or large payments to out-of-state companies,
  • having payments picked up by private courier services,
  • receiving lots of cheap items such as costume jewelry, small appliances, pens and pencils, beauty products, water filters, etc.,
  • getting calls from organizations offering to recover money that they have paid to telemarketers, for a fee,

 …then he or she may be a target of fraud.

Advice from the FBI
Seniors who are isolated and have little contact with family, friends, caseworkers, and other concerned parties may be at increased risk of being victimized by fraudulent businesses. Decreasing this isolation through police welfare checks, neighborhood watches, and in-person outreach efforts can help to ensure that elders are aware of available resources they can turn to with questions and concerns about potential scammers.  Further, ongoing contact with family members can provide the means to monitor an elder’s financial matters.

Bottom line from Attorney General Tom Miller
There are many good charities soliciting contributions in Iowa, and we help uphold the integrity of our system of giving by stopping fundraising abuses.  If you think you may have been cheated by a fundraising scheme, contact the Attorney General's Consumer Protection Division:

Phone:            515-281-5926, or 1-888-777-4590 (toll free)
Mail:                Office of the Attorney General
                        Consumer Protection Division
Hoover Building
Des Moines, Iowa 50319


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