Unscrupulous Fund-raising On Rise, Senate Told
Mar. 25, 1994
WASHINGTON (AP) _ Myron Dowd of Hartford, Mich., had watched his wife of 46 years suffer through Alzheimer's disease and endured the heartbreak of putting her in a nursing home.
He was lonely, 78 years old and ill himself. So, when telephone calls from charities started coming in last summer, he listened to the friendly voices on the other end of the line and sent them checks.
He sent more than $20,000 to solicitors, who either passed on only a small fraction of the money to the legitimate charities they represented or were representing bogus organizations, his son, Frank B. Dowd, told a Senate panel Thursday.
Frank Dowd, a research librarian in Washington, and a cousin of his father's were able to get back $4,900 through repeated telephone calls but most of the money is gone for good.
''It's an insidious, pernicious problem and must be stopped,'' he told the Senate Commerce consumer subcommittee.
Christian S. White, acting director of the Federal Trade Commission's consumer protection bureau, said fraudulent telephone fund-raising is on the rise.
He warned that ''unduly burdensome restrictions'' on for-profit fund- raisers could ''stifle legitimate charitable activity.'' But he said a bill sponsored by Sen. Richard H. Bryan, D-Nev., chairman of the subcommittee, would help fight charity fraud even though it's aimed at telemarketing fraud in general.
The bill directs the FTC to develop telemarketing rules and gives the agency the power to bring criminal contempt charges against telemarketers who violate court orders.
It also gives state attorneys general and private parties the right to bring suit in federal court to recover damages in telemarketing cases.
Versions of the legislation have passed both the House and Senate. The differences are expected to be worked out in conference and a bill enacted this year.
White said fraudulent telemarketers, based in Nevada, have shifted into charity fraud because state law doesn't require them to register if they are soliciting for charities. But this year the FTC has sued two of them in an effort to send ''a clear message that scammers cannot evade consumer protection laws simply by changing what they deceptively market.''
Steven J. Cole, general counsel of the Council of Better Business Bureaus, offered tips for avoiding being taken.
-Before making a donation, ask telephone solicitors to send written information about the charity's finances and programs.
-Never give your credit card number over the phone.
-Don't agree to send a check via overnight express mail or allow the charity to send a ''runner'' to pick up the check.
-Be wary of charitable appeals that require a donation to enter a sweepstakes.
-Check out the charity with a local Better Business Bureau or the state's charity registration office.