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Iowa pioneers efforts to stop fraudulent solicitations

Published On: Nov 13 2013 09:44:08 PM CST   Updated On: Nov 14 2013 07:26:10 AM CST


As the holiday season arrives, the only thing more obvious than the post-Thanksgiving turkey lethargy is the impending onslaught of end-of-year charitable solicitations -- except in Iowa, where the number of those calls that are fraudulent has been dramatically decreased thanks to a program run by the Consumer Protection Division inside the Iowa Attorney General's Office.

For the last two decades, Iowa residents besieged by telemarketers and charitable fundraisers have turned their phone numbers over to the state's top law enforcement agency. An employee there follows scripts when the phone rings and tapes the conversations.

"Our jobs are to protect our constituents, to protect Iowans, and we don't like to see any Iowan victimized by a scam," William Brauch, the special assistant attorney general who runs that division, said. "At the same time, we are pleased that it is so blatant that they've lied in the way that they have because we have great evidence then."

Charitable organizations are required to register with the state of Iowa if they're raising money there.

Brauch said they compare what they hear on the phone call with what the nonprofits have disclosed.

Fraudulent statements can lead to injunctive relief and court orders saying if it happens again, it can lead to fines, jail time or both.

"The stories they tell are convincing and it comes to you out of the blue when your phone rings," Brauch said. "You're just not prepared to raise questions about it and that's where people fall prey. They don't stop and think. They don't say, 'Wait a minute. Where are you from? Can you send me something in the mail?'"

Iowa has legislation that allows one of the parties in a phone conversation to record it without the knowledge of the other participant. When FBI agents raided telemarketing operations in Florida years ago, Brauch said there were signs on the boiler room cubicles which read, "Don't call Iowa."

"That tells us it's working," he said. "When we know the word is out across the scammer community that says we're having an impact."

At the Iowa Welcome Center in Dubuque, Christine Schmidt said the nationwide problem of telemarketers and charitable fundraisers is not much of a problem in her home state.

"There's maybe one here or there, but it's rare to get them," she said. "It's really nice."

Brauch said it's hard to quantify how many phone calls they've prevented from coming to Iowa phones, but that they've recovered millions of dollars in fines through the years. It costs the department roughly $100 a month to run the program, including money for the undercover phone line, a P.O. Box and occasional $5 or $10 purchases to various nonprofits to get on fundraiser lists.

Wisconsin has the same "one-party consent" taping law as Iowa, but Brauch said only one other state implements the same program Iowa is using. The Department of Financial Institutions this month took over the regulation of charitable organizations in Wisconsin and the Department of Justice investigates consumer fraud.

"The DOJ’s consumer protection unit uses a number of different investigative techniques to determine whether a business is acting outside of the law," Dana Brueck, communications officer for Attorney General J.B. Van Hollen said in an email to News3. "Those techniques, however, we do not typically discuss, as doing so could compromise future investigative efforts. We regularly bring enforcement actions based upon marketing misrepresentations and/or do-not-call violations."
Wisconsin consumers who want to report questionable practices are encouraged to call DFI at 608-267-7111.

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