Schuette: Dearborn-based Fundraiser to Pay $35k for Improperly Operating Clothing Donation Bins

Contact: Andrea Bitely, Megan Hawthorne; 517-373-8060

February 28, 2017

LANSING – Michigan Attorney General Bill Schuette today announced that professional fundraiser Golden Recyclers, Inc., of Dearborn, Michigan, has agreed to pay $35,000 for violating the Charitable Organizations and Solicitations Act. In addition, before operating any clothing donation bins in Michigan, Golden Recyclers will also revise the labels and disclosures on its bins to comply with state law

“Whether soliciting by phone, by mail, on the internet, or on a clothing donation bin, charitable solicitors must tell the truth,” said Schuette. “Deceptive solicitations hurt donors, hurt the charities that follow the laws, and hurt those that depend on charitable donations for clothing and other necessities.”

The fine is a result of the group deceptively operating over 300 clothing donation bins throughout the Metro Detroit area. One-third of the deceptive bins were labeled with the logo “Mercy,” but were not operated for the benefit of any charity. The remaining bins were labeled with the name of Cancer Federation, Inc., a California-based charity; but most of the funds raised went to the fundraiser, and the bins failed to include the necessary legal disclosures.

Background

In December 2016, the Attorney General Issued a Notice of Intended Action against Golden Recyclers, alleging 2,594 violations of the Charitable Solicitations Act. The violations stemmed from an investigation by the Attorney General’s Charitable Trust Section into the clothing donation bin operator following a consumer complaint about the “Mercy” bins—bins that displayed neither the name of a charity nor the name of the bin operator. It was discovered that the bins were operated by Golden Recyclers–allegedly for the benefit of the charity, Cancer Federation, Inc. Both organizations were asked to explain the bins. Cancer Federation responded saying that the “Mercy” bins were unauthorized and that it was ordering Golden Recyclers to cease and desist its operation. Nevertheless, Golden Recyclers continued operating the bins, as confirmed by photographs from the Attorney General’s investigators.

The investigation also revealed that Golden Recyclers’ operation of bins labeled “Cancer Federation” violated Michigan’s Charitable Solicitations Act. Golden Recyclers pays $12,000 a year to Cancer Federation Inc. to use its name under their current contract. This means all donations placed in the bins go to Golden Recyclers—not Cancer Federation Inc., a fact not disclosed on the bins.

Golden Recyclers was given 21 days to resolve the matter or face a civil action in court. Concurrent with the Notice of Intended Action, Attorney General also issued a Notice of Intent to Deny Cancer Federation’s charitable solicitation registration.

Upon receipt of the Notice of Intended Action, Golden Recyclers complied with the cease and desist order and began cooperating with the Attorney General to resolve the matter. Cancer Federation did not respond to the Attorney General’s Notice of Intent to Deny Registration, so the Attorney General has since denied Cancer Federation’s registration, preventing Cancer Federation from soliciting in Michigan.

Clothing Donation Bin Consumer Alert

In December 2016, because of the complaint against Golden Recyclers and because of other recent complaints regarding clothing donation bins, the Attorney General issued a Consumer Alert cautioning donors about deceptive clothing donation bins. That alert will remain posted on the Attorney General's website.

Recent Charitable Solicitation Enforcement Actions

In recent months, the Attorney General has brought enforcement actions against charities or their fundraisers regarding deceptive solicitations. In August 2016, Wyandotte-based Firefighters Support Services agreed to dissolve and to pay $144,000 to resolve the Attorney General’s allegations of deceptive solicitations. In September 2016, Utah-based professional fundraiser Corporations for Character agreed to withdraw from Michigan for four years and to pay a civil penalty of $90,000 to resolve the Attorney General’s allegations of solicitations fraud. In February 2017, Florida-based Breast Cancer Outreach Foundation agreed to a ten-year solicitations ban and to pay $150,000; likewise, in February, Florida-based Help the Vets agreed to a five-year solicitations ban.

Charitable Solicitation Resources and Complaints

To assist individuals in making wise decisions regarding which charitable donations to support, Attorney General Schuette established an online searchable database for charities. The Attorney General also publishes an annual professional fundraising charitable solicitation report. Through these resources, users have access to information to aid them in determining which charities are worth supporting—and which are not.

The Attorney General's Charitable Trust Section is also available at 517-373-1152 to answer inquiries about a charity. Complaints regarding charitable solicitations may be filed through the Attorney General’s online complaint form, or by mailing the Charitable Trust Section at P.O. Box 30214, Lansing, MI 48909-7714, or by emailing the Charitable Trust Section.

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