December 17, 2003
A federal district court has shut down a cross-border charity scam that solicited contributions from small businesses to donate childrens books to hospitals.
The default judgment entered against Healing Hands Busy Book, permanently bars the defendants from making false claims regarding the marketing of any products or services for donation. The FTC will disburse approximately $80,000 in consumer redress from returned donation checks.
In May 2003, the Federal Trade Commission filed a complaint charging that the Canadian defendants telemarket to businesses in small communities, falsely representing that they are affiliated with or authorized by local hospitals in those communities to solicit sales of the books on their behalf.
The complaint also states that the defendants falsely represent that children in those hospitals actually will receive the books purchased. According to the FTC, the books purchased for donation are never delivered to the hospitals.
The court ordered the defendants to pay $500,000 in consumer redress.
The FTC urges consumers and businesses to be wary of potential charity fraud.
- Be wary of appeals that tug at your heart strings;
- Ask for the name of the charity if the telemarketer does not provide it promptly;
- Ask what percentage of the donation is used to support the causes described in the solicitation, and what percentage is used for administrative costs; and
- Call the local groups to verify a telemarketers claim that the charity will support local organizations.
