Florida Company That Preyed on the Goodwill of Consumers Banned from Engaging or Assisting Others in Fundraising Activities

Community Affairs, Inc. (CAI), a for-profit telemarketing operation that preyed on the goodwill of consumers by making misleading fundraising solicitations for a number of police and firefighters-related charities, and its officers, have settled Federal Trade Commission charges. CAI, also known as Powertel and Mountaineer Teleservices, Christopher Heins, and Luis Ferreira are banned from engaging or assisting in any manner in the solicitation of contributions from any donor as part of the FTC settlement.

The FTC filed its complaint against the defendants in May 2003, as part of “Operation Phoney Philanthropy,” a law enforcement and public education campaign by the FTC and state charity regulators to stop fraudulent fundraising. The complaint alleged that the defendants, based in Pompano Beach, Florida, acting through their telemarketers, posed as police officers or firefighters; falsely implied that the consumer had previously pledged or donated to the charity; or misled consumers about other material information, such as the use to which the donations would be used. The FTC alleged that the defendants typically retained over 80 percent of all donations.

The proposed order to settle the FTC’s charges permanently prohibits the defendants from engaging in the solicitation of contributions from any donor, directly or indirectly. The settle-ment further prohibits the defendants and persons who receive actual notice of the final order from making or assisting others in making any false or misleading representation in connection with the offering for sale of any good or service.

The settlement contains a suspended $12 million judgment that would be due in full if it is found that the defendants lied on their financial statements submitted to the court.

Finally, the settlement contains various recordkeeping requirements to assist the FTC in monitoring the defendants’ compliance.

The Commission vote authorizing staff to file the stipulated final judgment and order was 5-0. The stipulated final judgment and order were filed in the U.S. District Court, Southern District of Florida, and approved by the court.

NOTE: This stipulated final judgment and order are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Stipulated final judgment and orders have the force of law when signed by the judge.

Copies of the stipulated final judgment and order are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. X030045)
(Civil Action No. 03-60852-CIV (Marra/Seltzer)