FTC Announces Crackdown on Fraudulent Servicemember Charities
State actions announced include allegations that charities and fundraisers sought donations online and via telemarketing, direct mail, door-to-door contacts and at retail stores, falsely promising to help homeless and disabled veterans, to provide veterans with employment counseling, mental health counseling or other assistance, and to send care packages to deployed servicemembers. Some actions charged veterans charities with using deceptive prize promotion solicitations. Others targeted non-charities that falsely claimed that donations would be tax deductible. Some cases focused on veterans charities engaged in flagrant self-dealing to benefit individuals running the charity, and some alleged that fundraisers made misrepresentations on behalf of veterans charities or stole money solicited for a veterans charity.
Last year, the FTC and the National Association of State Charities Officials hosted a workshop that brought together regulators, researchers, charity watchdogs, donor advocates and members of the nonprofit sector. Discussions focused on how people evaluate and respond to various charitable solicitation practices and the role of consumer protection.
Richard B. Newman is a regulatory litigation and defense attorney at Hinch Newman LLP focusing on local, state and federal advertising and digital media matters. Follow him on Twitter @FTCLawDefense.
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