Scammers made more than 1.7 million robocalls into Washington state, pocketed 90 cents of every dollar they claimed to raise for charity
SEATTLE — As a result of a lawsuit brought by Attorney General Bob Ferguson, 39 other attorneys general and the Federal Trade Commission (FTC), two national companies that made more than 1.7 million robocalls for sham charities into Washington state will pay $495,000 to help fund legitimate charities. One company has since gone out of business and today’s lawsuit requires another one to dissolve.
The federal lawsuit, filed in the U.S. District Court for the Eastern District of Michigan, asserts two companies, Associated Community Services (ACS) and Directele, targeted 67 million consumers across the US with 1.3 billion deceptive charitable fundraising calls.
Ferguson’s lawsuit asserts that ACS and Directele violated Washington’s Consumer Protection Act by misrepresenting charitable solicitations, using false area codes for calls and making harassing telephone calls.
Managers and employees working for ACS and Directele knew the funds they raised did not go to the causes they promoted. The two companies promoted numerous organizations that falsely claimed to support homeless veterans, victims of house fires, breast cancer patients, children with autism or other causes used to entice support from people with good intentions.
These nonprofits only received a small amount of the money raised, sometimes as little as one-tenth of one percent. Meanwhile, ACS and Directele managers or owners pocketed as much as 90 cents of every dollar solicited on behalf of the charities.
“Everybody hates finding themselves on the receiving end of harassing robocalls – and that’s especially true when those harassing call are promoting scams” Ferguson said. “My office will hold anyone accountable who cheats hardworking Washingtonians out of their money, wherever they operate.”
Directele, a firm purchased by a former ACS manager who took some of its nonprofit clients with her, made more than 140,000 charitable solicitation calls to individuals with Washington phone numbers since January 2019. These calls resulted in 113 Washingtonians donating a total of $2,867.
Between January 2016 and July 2019, ACS made 41.8 million solicitations to 1.65 million Washington area codes in two and a half years. It’s unknown the exact amount ACS raised from these calls. According to a review of financial records, the companies’ managers and owners spent most of the money.
As a result of the lawsuit, the companies’ managers are now permanently prohibited from any fundraising work or consulting on behalf of any charitable or nonprofit organization that claims to support similar causes to those outlined in the complaint. The agreement also prohibits them from using robocalls for any form of telemarketing, using abusive calling practices or making any misrepresentation about a product or service.
ACS ceased operations in late 2019 and is now insolvent. As a result of the lawsuit, Directele is required to cease operations and dissolve.
In August 2018, Attorney General Ferguson recovered more than half a million dollars from one of ACS’s former clients after receiving nine complaints it misled donors. The money went to fund breast cancer screenings for underinsured women, as donors originally intended.
Assistant Attorney General Josh Studor handled the ACS and Directele cases for Washington.
Combating robocalls in Washington state
On August 26, 2020, King County Superior Court Judge Susan Craighead ordered Vancouver, Wash.-based air duct cleaning companies, US Air Ducts & Sky Builders Inc. and DLM Services Inc., as well as owner Rami Mornel, to pay civil penalties of $10 million in Ferguson’s lawsuit over their deceptive advertisements and robocalls. The companies made over 13 million robocalls within Washington state from 2017 to 2019, including calling more than 500 individual Washington consumers over 100 times.
The Attorney General’s Office received dozens of complaints about the companies’ robocalls and deceptive advertising and services. Washingtonians also filed nearly 120 complaints about the companies with the FTC.
The judge ruled earlier in 2020 that the companies and Mornel violated the Consumer Protection Act in numerous ways, including robocalling Washingtonians without permission, misleading people about who was calling and posting fake Google reviews to falsely build their brand. The judge’s order also permanently barred the companies and Mornel from making robocalls or deceptively marketing these services in the future.
The court previously found US Air Ducts and DLM Services violated state laws in multiple ways, including:
- Making millions of robocalls to more than a million Washingtonians without their permission, violating the Washington Auto Dialing and Announcing Device statute (WADAD).
- Deceiving Washingtonians by disguising their caller IDs to mislead them as to who was calling, violating the Consumer Protection Act (CPA).
- Making millions of robocalls to hundreds of thousands of Washington telephone numbers on the federal Do Not Call registry, in violation of the Consumer Protection Act.
- Mailing advertisements implying the promotional price for the service in the advertisements was a reduction from the regular price and was only a “limited time offer” ― neither of which was true ― violating the Consumer Protection Act.
- DLM Services created fake Google reviews to misrepresent its reputation to Washingtonians, violating the Consumer Protection Act.
Techniques to identify scammers
Scammers can use charities to prey on generosity. Do plenty of research before donating money. To make sure a charity is legitimate:
- Ask for detailed information about the organization, including an address, phone number and name
- Ask the organization what percentage of donations benefit the actual cause
- Check if the charity is registered with the Washington Secretary of State
Visit ftc.gov/charities for more information on how to avoid charity scams.
Consumers affected by these charities’ deceptive conduct, or any other charity or business, may file a complaint with the Attorney General’s Office at https://www.atg.wa.gov/file-complaint.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Brionna Aho, Communications Director, (360) 753-2727; Brionna.email@example.com
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