Minnesota Sues Veteran Charity’s Fundraisers

     (CN) — Alleging deceptive and high-pressure sales tactics, Minnesota wants a state court to shut down companies that solicit donations for a veterans’ charity.
     Minnesota filed the suit on May 25 against Associated Community Services and Central Processing Services, two for-profit companies owned by the same parent company and headquartered in Southfield, Michigan.
     Attorney General Lori Swanson says the companies’ telemarketing and mailers are responsible for every donation received by Foundation for American Veterans.
     In Minnesota, that amounts to a pretty penny.
     The foundation reported $38.5 million in revenue from 2010 to 2014, and Swanson says more than 28,000 Minnesotans are responsible for nearly $930,000 of those donations from late 2011 through late 2015.
     Foundation for American Veterans is not a party to the lawsuit, but Swanson takes care to note that it has paid its fundraisers, ACS and CPS, “at least $27 million since 2010.” That amounts to more than 80 percent of the monetary donations it received.
     Swanson says senior citizens bear the brunt of the companies’ deceptive solicitation tactics.
     Among various deceptive and high-pressure sales tactics described in the complaint, Swanson says ACS and CPS sent bogus pledge reminders that falsely indicated the recipients had pledged to donate, when they had not.
     Swanson notes that similar allegations have dogged ACS and CPS years, prompting at least 10 deals with regulators.
     Amid bankruptcy proceedings last year, according to the complaint, ACS changed its autodialing system to intensify the frequency of its donation solicitations.
     Swanson says the change led one Minnesota resident to receive 42 calls in a period of four months.
     This pattern of ACS and CPS generating consumer complaints is even known to its client, the veteran’s charity, according to the complaint.
     Swanson quoted the national director of Foundation for American Veterans as saying that “there is a pattern growing here now,” regarding complaints against ACS.
     When the foundation brought these complaints to the attention ACS again in 2012, according to the complaint, it decided to do nothing since “the amount of complaints does not impact donations.”
     “I expect we will continue to get more complaints of this nature and a regulator might notice the pattern and as us to explain what is going on,” one ACS employee said, as quoted in the suit.
     Swanson also quotes one U.S. Air Force veteran from Moorhead, Minnesota, as saying that she did not “appreciate that FAV is making repeated, unwanted calls to my home and using aggressive solicitation tactics to fundraise money in the name of veterans.”
     Assistant Attorney General Carol Washington signed the state’s complaint.
     ACS and CPS have not returned requests for comment.
     Swanson notes that Foundation for American Veterans is based in West Bloomfield, Michigan.
     The charity has just two paid employees and five board members, with no dedicated office space.

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