In first case, July lawsuit alleged "Action Point" boosted sales through telemarketers falsely claiming to be disabled veterans
(DES MOINES, Iowa) A Polk County judge today barred a Phoenix company from soliciting Iowans after Attorney General Tom Miller alleged that the for-profit company tried to boost sales of high-priced products by falsely claiming that its telemarketers were disabled veterans.
District Court Judge Mary Pat Gunderson permanently restrained Action Point, LLC, and its owner, Robert Foster, from any telemarketing or direct mail to Iowa consumers. The court order, called a consent judgment, resolved a lawsuit that Miller’s office filed and announced in July.
In the lawsuit, Miller alleged that Action Point telemarketers made misleading claims in calls to Iowans, including 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 veterans in need.
The Consumer Protection Division recorded the claims on an undercover phone line, which records solicitation calls that telemarketers are placing to elderly Iowans. In a December 27, 2011 recording, the solicitor claimed that “everyone that works at Action Point does have a physical disability.” The solicitor, who was attempting to sell $50 containers of cookies, added that “80 percent of the guys here are disabled veterans.”
According to the lawsuit, owner Robert Foster directly contradicted the recorded claims regarding disabilities and military injuries. Foster acknowledged that no one involved in Action Point’s operations is disabled, and that none of the proceeds go to help the disabled.
The lawsuit alleged that Action Point extracted the largest amounts from Iowans age 65 or over through frequent and repeated solicitation calls, and by getting some Iowans to spend as much as $2,000 in a single call.
Foster and the company did not admit liability.
Judge Bans Phoenix Telemarketer from Calling Iowans
In second case, undercover phone line captures “America Workshops”
violating previous pledge to stop calling Iowans for money
In an unrelated case, Miller today also announced that a Polk County judge has banned a Phoenix, Arizona for-profit company and its owner from calling Iowans.
America Workshops, LLC, owned and managed by George Thomas, is a telemarketing sales operation. America Workshops sells light bulbs, trash bags, and other household and personal items by phone. Though the company doesn’t explicitly claim to be a charity, Miller alleged that the company uses a charity-themed sales pitch to sell the items at premium prices.
“Callers say they are not a charity asking for donations, but that purchases help workers by providing them jobs, so they can be ‘tax payers’ not ‘tax burdens,’” Miller said. “And we know their callers sometimes go much further by making unauthorized and dubious claims that purchases provide vital shelter credits to veterans.”
Miller said that America Workshops came to the attention of his Consumer Protection Division when an Iowa woman complained that questionable telemarketers repeatedly took advantage of her elderly mother. The mother’s records showed that she had twice made substantial purchases from America Workshops’ telemarketers in early 2011, one for $199.95 for unknown items and one for $329.80 for kitchen knives.
After the company initially failed to respond to the Consumer Protection Division’s efforts to investigate the elderly woman’s purchases and the company’s overall conduct, Miller’s office sought a court order to force the company to cooperate. Prior to a hearing the company responded, and in May Thomas committed to stop calling Iowa customers.
Despite Thomas’s assurances, however, the Consumer Protection Division captured one of the company’s telemarketing calls to an undercover phone line in August. The telemarketer, thinking she was speaking to the elderly woman whose daughter had complained, told a Consumer Protection Division staffer that because there had been a failure to follow through on an earlier promise to one of their veterans to purchase light bulbs for $189.90, the veteran and his daughter would be losing seven months of shelter credit. The telemarketer went on to press for a new purchase, saying “I don’t want them to have to sleep at the bus stop.”
“At that point we knew the company’s previous commitment not to call Iowans was worthless,” Miller said. Miller’s office then sought a court order prohibiting all Iowa telemarketing. A Polk County judge issued a ban on October 26, through a consent judgment. Thomas and the company did not admit liability.
“This company’s attempt to pressure an old woman to shell out almost $200 dollars for light bulbs to keep a veteran and his daughter from being turned out on the streets is shameful almost beyond description,” Miller said. “Good riddance, and we’ll be watching.”
While these cases involve for-profit companies and not charitable organizations, Miller reminds Iowans to give, but to give wisely by being aware of charity fraud. Be leery of a sympathetic name or sales pitch, ask specific questions about how the organization spends its money, and request written information.
There are many excellent charities soliciting contributions in Iowa, and the Consumer Protection Division targets fundraising abuses and upholds 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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