FTC and states wrap up largest charity enforcement action ever

Last May, we told you that the FTC, along with all 50 states and the District of Columbia, announced a complaint against four sham charities. Children’s Cancer Fund of America and the Breast Cancer Society agreed to shut down, but Cancer Fund of America (CFA) and Cancer Support Services (CSS) refused – until now.

CFA, CSS and their leader, James Reynolds, Sr., have since agreed to settle charges that, while those two groups claimed to help cancer patients, they actually spent the overwhelming majority of donations on their operators, families and friends, and fundraisers.

Under the settlement order announced today, CFA and CSS will shut down and their assets will be liquidated. The order also imposes a judgment against CFA, CSS, and Reynolds of $75,825,653, the amount consumers donated to CFA and CSS between 2008 and 2012. What’s more, Reynolds is banned from profiting from charity fundraising and nonprofit work, and from serving as a charity’s director or trustee or otherwise managing charitable assets.

If you’re considering donating to a charity, do some research before you give. By finding out as much as you can about the charity, you can avoid fraudsters who try to take advantage of your generosity.

• Ask the charity questions directly about what it will do with your money.
• Search the name of the organization online. Use the words “complaints” or “scam.”
• Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials.
• Check if the charity is trustworthy by contacting the Better Business Bureau’s Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.

The National Do Not Call Registry gives you a way to reduce telemarketing calls, but charities are exempt. However, if a fundraiser is calling on behalf of a charity, you can ask not to get any more calls from that fundraiser on behalf of that charity. Just say “please put me on your do not call list.” If those calls continue, the FTC wants to hear about it. The fundraiser may be subject to a fine.