Charity-Related Telemarketer InfoCision Charged by FTC with Making Express Misrepresentations to Solicit Donations
The FTC issued a press release regarding Akron, Ohio-based InfoCision, Inc., a company that has made millions of calls to consumers nationwide on behalf of charitable organizations.
InfoCision has agreed to pay a $250,000 civil penalty to settle Federal Trade Commission charges that InfoCision’s telemarketers misled consumers by falsely saying they were not calling to solicit contributions.
The proposed order settling the charges, filed by the Department of Justice on the FTC’s behalf, also bars InfoCision from violating the FTC’s Telemarketing Sales Rule, which requires telemarketers calling on behalf of a charity to promptly tell someone the charity on whose behalf they are calling and if the purpose of the call is to seek a donation.
FTC’s Telemarketing Sales Rule – An Overview
The FTC’s complaint filed against InfoCision, Inc. described the FTC’s Telemarketing Sales Rule as follows:
Congress directed the FTC to prescribe rules prohibiting abusive and deceptive telemarketing acts or practices pursuant to the Telemarketing Act, 15 U.S.C. §§ 6101- 6108. The FTC adopted the original Telemarketing Sales Rule in 1995, extensively amended it in 2003, and amended certain provisions thereafter. See 16 C.F.R. Part 310.
Section 1011 of the USA Patriot Act, codified in relevant part at 15 U.S.C. §§ 6102 and 6106, amended the Telemarketing Act to cover “charitable solicitations” and directed the FTC to expand the scope of the Telemarketing Sales Rule to cover calls made to solicit charitable contributions.
In 2002, the FTC amended the Telemarketing Sales Rule to modify the definition of telemarketing to:
- include interstate calls made by for-profit telemarketers to solicit charitable contributions;
- require for-profit telemarketers calling to solicit such contributions to promptly disclose the name of the organization making the request and that the purpose of the call is to ask for a charitable contribution; and
- prohibit for-profit telemarketers from making a false or misleading statement to induce any person to make a charitable contribution.
These requirements ensure that for-profit telemarketers that solicit charitable contributions are truthful about the purpose of the call and that consumers receive material information so that they can make informed choices about whether to engage with the telemarketers and give a charitable contribution.
Under the Telemarketing Sales Rule, a “telemarketer” means “any person who, in connection with telemarketing, initiates or receives telephone calls to or from a customer or donor.” 16 C.F.R. § 310.2(ff).
A “donor” means “any person solicited to make a charitable contribution,” 16 C.F.R. § 310.2(p), and a “charitable contribution” means “any donation or gift of money or any other thing of value.” 16 C.F.R. § 310.2(h).
Under the Telemarketing Sales Rule, an “outbound” telephone call means “a telephone call initiated by a telemarketer to induce the purchase of goods or services or to solicit a charitable contribution.” 16 C.F.R. § 310.2(x).
The Telemarketing Sales Rule prohibits telemarketers from “[m]aking . . . false or misleading statement[s] to induce any person to pay for goods or services or to induce a charitable contribution.” 16 C.F.R § 310.3(a)(4).
USA v. InfoCision, Inc. – The FTC’s Complaint for Civil Penalties, Permanent Injunction & Other Relief
According to the FTC’s complaint, since at least 2013, InfoCision has conducted hundreds of telemarketing campaigns reaching consumers nationwide on behalf of charitable organizations. In some of those campaigns, the FTC alleges, InfoCision’s telemarketers called consumers and told them at the start of the call that they were not calling to ask for a donation.
According to the FTC, the telemarketers subsequently asked consumers to mail or hand-deliver materials requesting donations to family members, friends, or neighbors. Additionally, in many cases, despite initially saying they were not calling to solicit donations, InfoCision’s telemarketers allegedly asked consumers to donate money, generally in amounts ranging from $10 to $50. Based on this conduct, the FTC’s complaint charges InfoCision with making false or misleading statements to induce consumers to make a charitable contribution, in violation of the Telemarketing Sales Rule.
The proposed order settling the FTC’s charges bars InfoCision, in connection with its telemarketing activities, from making any false or misleading statements designed to induce anyone to pay for goods or services or make a charitable contribution.
The FTC’s proposed order also requires InfoCision, when making outbound telemarketing calls to induce a charitable contribution, to truthfully disclose: 1) the name of the charity on whose behalf it is making the call; 2) that the purpose of the call is to solicit a charitable contribution; and 3) whether the contribution sought is a donation, monetary gift, or anything else of value. The order also bars InfoCision from violating the Telemarketing Sales Rule in the future.
Finally, the order imposes a $250,000 civil penalty against InfoCision and includes standard recordkeeping and monitoring provisions to ensure compliance with its terms.
Consumers: For-Profit Charitable Callers Must Follow the Telemarketing Sales Rule
A recent FTC blog posting advised that “The Do Not Call Registry” is designed to stop unwanted sales calls; however, one exception to the Do Not Call Registry allows for-profit fundraisers to call individuals on behalf of charities even if one’s telephone number is listed on the Do Not Call Registry. When these charitable fundraisers call someone, however, they must still follow the Telemarketing Sales Rule.
Examples of Telemarketing Sales Rule requirements that charitable, for-profit fundraisers must follow:
- Fundraisers can’t call before 8 a.m. or after 9 p.m.
- Fundraisers must promptly state the charity they’re calling for and state that the purpose of the call is to seek a donation.
- Fundraisers can’t make a false or misleading statement to persuade one to donate.
- Fundraisers cannot misrepresent information during the call, such as the fundraiser’s connection to the charity; the mission or purpose of the charity; whether a donation is tax deductible; or how a donation will be used or how much of the donation actually goes to charity programs.
- Fundraisers cannot use a robocall or prerecorded message to reach an individual unless the individual has supported the charity in the past.
- Fundraisers also cannot call a person again if the person tells them that he/she does not want any more calls from that charity.
Have You Received Unsolicited or Unwanted Telemarketing Calls, Autodial Calls, Robocalls or Text Messages?
If you have received unwanted, unsolicited or harassing telemarketing calls, autodial calls, robocalls or text messages and would like to speak privately with an attorney to learn more about your potential legal rights, please complete the form to the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].