Court Closes the Book on Charity Scam

A federal district court has shut down a cross-border charity scam that solicited contributions from small businesses to donate children’s books to hospitals. The default judgment entered against DPS Activity Publishing, Ltd., doing business as Healing Hands Busy Book, and principals David Suggitt (aka David Sumner) and Tabea Suggitt, 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 FTC filed a complaint against the Canada-based defendants as part of its “Operation Phoney Philanthropy” sweep. The FTC alleged that the 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 either never delivered to the hospitals or will never be distributed to children because the hospitals to which they are donated have no use for them.

The default judgment prohibits the defendants from misrepresenting (1) that they are affiliated with local hospitals in the communities where they solicit donations, and (2) that the children at those hospitals will receive the books that local businesses purchase. The judgment requires the defendants, when soliciting for donations, to disclose that the hospitals that receive their books are not obligated to give them to children. Additionally, the judgment bars the defendants from soliciting orders that cannot be delivered within the time stated in the solicitation. Finally, 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. The agency has a “Charity Checklist,” available at www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt114.shtm, to help consumers be sure that their donation dollars benefit the people and organizations they want to help. The checklist provides valuable tips, including:

• 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 telemarketer’s claim that the charity will support local organizations.

For more information, visit www.ftc.gov/charityfraud.

The FTC would like to thank the U.S. Postal Inspection Service, Chicago Division, and the Illinois Attorney General’s Office, Bureau of Charitable Trusts and Solicitation, for their tremendous assistance in this case.

Copies of the default judgment 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, 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.

(Civ. No. C 03-1078C)