Operators behind Scam PACs have been fined $110 million dollars by FTC
In a flurry of court filings, the Federal Trade Comission told a Michigan federal judge that six groups of companies and individuals have agreed to pay up to $110 million to settle claims they tricked millions of Americans into donating to charities that failed to provide the services they promised.
The FTC, along with 46 agencies from 38 states and Washington, D.C., sued Michigan-based Associated Community Services Inc., Directele Inc., their sister companies and eight individuals who operate them in January, accusing them of soliciting donations for fraudulent charities since at least 2008 by making 1.3 billion calls to more than 67 million telephone numbers in the United States.
The lawsuit claims that the calls targeted older adults and misled them into believing the majority of their donations would go to charities supporting breast cancer patients, the families of children with cancer, homeless veterans, fire victims, children with autism and other causes. These same calls used prerecorded soundboards which targeted a large portion of the population and reach a significant number of potential victims.
ACS and its sister companies were the subject of 20 prior law enforcement actions for their fundraising practices, and it closed its doors in late 2019, according to the FTC. But ACS' managers moved on to Directele and its sister companies where they continued the deceptive fundraising scheme, the suit alleges. Most of Directele's soundboard calls originated from call centers in the Philippines and India, according to the FTC.
Under the proposed deals, which are subject to court approval, each of the defendants are permanently barred from fundraising or consulting on behalf of any charitable organization, and they agreed to enter six separate judgments totaling $110 million, which have been partially suspended due to the defendants' inability to pay, according to the FTC. In addition to the six payments, Cole will be required to turn over the proceeds of the sale of a vacation home in Michigan, and Stepek must sell his ski boat, the FTC said.
The scam PAC category was introduced to BobRTC last year, and these robocalls have become the most prevalent scam calls on the telephone network.
You can find the full order directly from the FTC website here.