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PART 5
These telemarketers never stray from the script
by Kris Hundley, Times Staff Writer

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Thursday, November 14, 2013 10:30am

http://www.tampabay.com/news/these-telemarketers-never-stray-from-the-script/2152303



Amanda Thomas is the perfect telemarketer. She's always perky and pleasant. She races through her pitch without a stumble or pause. She never deviates from the script.

"We know it's a bad time right now with the economy and all," she told a South Carolina resident during a call recorded last year. "But the folks we're helping are fighting cancer and they're in need and they're struggling."

Over the past several years, Amanda has called millions of people and helped generate millions of dollars in donations, never once asking for so much as a bathroom break.

"Amanda Thomas" and "Jeff Stewart," her male counterpart, are the latest advancement in charity telemarketing.

But they aren't real people.

They are computer-generated pitchmen designed to seem lifelike on the phone without the messiness of actual humans talking.

Call center workers no longer have to say a word. Instead, they monitor up to three calls at once and tap on separate computer keyboards to choose a pre-recorded response.

When in doubt, employees orchestrating the calls can fill in with phrases that punctuate casual conversation: "yeah," "un-huh" and "no worries."

Many people never realize they are talking to a computer. In the past year, 20 consumers complained to the FTC about "Amanda" from Associated Community Services. Only one guessed she was a recording.

But occasionally someone gets wise.

A South Carolina man recorded a call from Amanda last year and shared it with that state's charity regulators.

Skeptical of who he was talking to, the man asked Amanda to spell "cat."

Her response: "Anything off my script, I'm supposed to get my manager to answer, so hold on just a second, OK?"

Corporations for Character, a telemarketing firm in Murray, Utah, started developing the software now known as the "Echo System" in 2005. Chief executive Forrest S. Baker III said he was looking for a way to increase efficiency because so little money raised by telemarketers actually goes to charity.

Today, the technology is used by Baker's firm and has been licensed by a third party to at least two other telemarketing companies. Among them is Associated Community Services, one of the nation's largest telemarketers, which calls on behalf of about two dozen charities.

When the Echo system was first introduced at the company in 2011, workers monitored two calls at a time. Today, thanks to a recent expansion, they monitor up to three, employees say.

Mike Bills is chief executive of CallAssistant LLC, whose company licenses the Echo system. He said the software ensures that callers make all required disclosures, thereby avoiding regulatory problems. But this month, Corporations for Character paid a $2,000 fine after "Amanda Thomas" failed to identify herself as a paid solicitor on a call taped by regulators.

In a letter to the South Carolina secretary of state, an attorney for the telemarketer blamed their employee for the mistake. They wrote that they had provided "immediate and additional training for the employee that made the call."

Critics of the Echo system point out that it primarily benefits telemarketers, who double or triple the number of calls handled by a single employee.

And with telemarketers keeping as much as 95 percent of money raised, they stand to benefit the most from increased donations.

The agreement between Corporations for Character and Cancer Fund of America shows how lucrative the arrangement can be.

The Knoxville charity agreed to pay Baker's telemarketing firm 95 percent of all initial donations using the Echo system, then 80 percent of all subsequent donations by the same person.

In 2012, Cancer Fund netted about $40,000 of more than $414,000 raised using the software. The rest went to Baker's company, according to reports filed with North Carolina regulators.

Regulators are also concerned that the Echo system is deliberately designed to trick people into thinking they're talking to a live person.

When a curious caller in South Carolina asked if she was talking to a recording, the telemarketer hit a button that responded with a laugh and the phrase, "Do I sound that bad?"

"You are actually talking to a live person," the recording continued, "but I'm using a computer for quality-control purposes."

CallAssistant's chief executive defends the subterfuge.

"The answer is being played by a live agent," Bills said. "There's absolutely someone at the other end of the line."

But the deception was too much for one South Carolina woman, who was disgusted when Amanda kept insisting she was a real person.

"I'm ending this ridiculous call," the woman said before hanging up.

Amanda didn't miss a beat.

"Thank you so much. Bye-bye."

Kris Hundley can be reached at khundley@tampabay.com.


SCOTT KEELER | TimesIowa regulators have used this phone in the state attorney general’s office for years to secretly record telemarketing calls.
These telemarketers never stray from the script 11/14/13 [Last modified: Monday, November 18, 2013 11:43am]

© 2014 Tampa Bay Times

PART 6
Large telemarketer for charities declares bankruptcy
by Kris Hundley, Times Staff Writer

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Friday, March 14, 2014 4:20pm

One of the nation's largest charity telemarketing firms filed for bankruptcy Thursday.

But the Chapter 11 filing by Michigan-based Associated Community Services is unlikely to end the phone calls from its employees, who solicit in Florida and 40 other states for some of America's poorest performing charities.

In a court filing, company president Richard Cole asked for approval to continue paying Associated Community Services' nearly 900 employees in order to remain in business.

In an email to the Tampa Bay Times, Cole said, "The bankruptcy will offer our company the opportunity to restructure and serve our clients more efficiently."

Associated Community Services, co-owned by Cole and Robert W. Burland, was profiled in the Times' and Center for Investigative Reporting's series on charities that routinely allow outside solicitors to retain the majority of funds raised. Founded in 1999, the telemarketer keeps as much as 85 percent of every dollar donated by the public. It solicits for dozens of charities, including nine of the 50 worst named in the Times'/CIR series. Among its clients are Cancer Fund of America and Children's Cancer Fund of America, Nos. 2 and 10 respectively.

IRS records filed by charities show that Associated Community Services raised nearly $40 million for its clients in 2011.

The telemarketer has been repeatedly disciplined by state regulators for misleading donors in its fundraising calls. Last year it was banned from soliciting in Iowa; last month it was fined $45,000 by Michigan's attorney general for deceiving senior citizens. The company denied any wrongdoing.

Though it kept the vast majority of the money raised, Associated Community Services said in court documents that its revenues have been declining by more than $100,000 a week over the past year. Meanwhile, its debts have risen, with the landlord of its call center in the Detroit suburb of Southfield threatening to terminate the lease for unpaid rent.

The company also owes more than $15 million in unpaid taxes to the IRS and more than $1 million in unpaid state tax.

In financial projections provided to the court, Associated Community Services said it expects to be "nominally profitable" by early May, netting about $50,000 on more than $5 million in revenue over the coming eight weeks.

Large telemarketer for charities declares bankruptcy 03/14/14 [Last modified: Friday, March 14, 2014 5:06pm]

© 2014 Tampa Bay Times

PART 7
Overhaul of Florida charities law seems headed for passage
by Tia Mitchell, Times/Herald Tallahassee Bureau

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Thursday, April 3, 2014 6:56pm

TALLAHASSEE — A sweeping charities reform package is breezing through the Legislature despite earlier concerns that legitimate philanthropies might be harmed by new rules.

The House bill received unanimous support in three committees and is now ready for a vote on the floor. The Senate bill has one more committee, and members who had been worried about reputable charities now say their issues have been addressed.

"I believe that those concerns have been worked out with the bill sponsor and I've been assured that those concerns are no longer valid," said Sen. Kelli Stargel, R-Lakeland, who was one of two senators to vote against the proposal during its first committee hearing.

State Agriculture Commissioner Adam Putnam started working on what has been called the most extensive rewrite of state charities laws after reading an investigation by the Tampa Bay Times and the Center for Investigative Reporting called "America's Worst Charities.'' His office's responsibilities include charity oversight, and his staff has been tweaking the bill to deal with concerns as they arise.

For example, charities initially complained about a requirement that they submit audited financial statements to state regulators to remain in good standing. They insisted this was costly and duplicative because they already give similar information to the federal government.

The bills have since been amended to allow charities to provide the state copies of their IRS Form 990, an annual statement certain tax-exempt organizations must file. This step would make it easier for consumers to see this document.

"That should provide a lot of transparency to the public in order to get a clear picture of the organization's finances," said David Biemesderfer, president & CEO of the Florida Philanthropic Network.

Under the proposal, the state also would overhaul its charities website to include more detailed contact and financial information.

Nonprofits that receive more than $1 million in contributions but spend less than 25 percent of it on programming will have even more requirements. This provision is targeted at organizations like Allied Veterans of the World, the now-defunct Internet cafe operator that for years justified its dealings using the state's lax charities laws.

The measure also requires paid fundraisers, who mostly seek donations over the telephone, to meet similar requirements as telemarketers.

And it also addresses a ubiquitous but often ignored aspect of charity: clothing receptacles in parking lots. Under the proposal, groups with these boxes would have to display a sign with contact information on the bins and clearly state whether the organization is a for-profit or not.

Rep. Jim Boyd, R-Bradenton, is the sponsor of House Bill 629. He said the bill should have no problem gaining the approval of the full House and Senate so it can land on Gov. Rick Scott's desk for his signature.

"I think there is a lot of desire by the members to address the issue," Boyd said. "I expect it to succeed."

Sen. Jeff Brandes, R-St. Petersburg, is the sponsor of the Senate version, SB 638, and said he expects it to be heard in the Appropriations Committee as soon as next week.

Tia Mitchell can be reached at (850) 224-7263 or tmitchell@tampabay.com.

Overhaul of Florida charities law seems headed for passage 04/03/14 [Last modified: Friday, April 4, 2014 8:48am]

© 2014 Tampa Bay Times

PART 8
Newspaper report triggers investigation and fine for charity consultant
by Kris Hundley, Times Staff Writer

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Wednesday, April 23, 2014 9:27pm


Telemarketing consultant Mark Gelvan was fined $50,000 for violating a ban on fundraising.

New York regulators fined a telemarketing consultant for some of America's worst charities $50,000 on Wednesday after officials determined he had violated a lifetime ban on raising money there.

New York's attorney general began investigating Mark Gelvan of Montville, N.J., after the Tampa Bay Times and The Center for Investigative Reporting revealed in June that Gelvan remained active in the fundraising industry despite his ban.

The Times/CIR report ranked America's 50 worst charities based on the money they spent hiring professional solicitors. Gelvan acted as a fundraising consultant with several of those charities.

In a press release, New York Attorney General Eric Schneiderman said Gelvan violated his ban when his company brokered fundraising agreements for two charities.

Schneiderman's office said Gelvan arranged for a telemarketer to call New Yorkers on behalf of Woman to Woman Breast Cancer Foundation in Florida and the National Vietnam Veterans Foundation in Virginia.

Gelvan received more than $37,000 in money raised for the two charities from New Yorkers, the state's investigation found. Gelvan did not return a call for comment.

In 2004, Gelvan agreed to a lifetime ban on raising funds for charity in New York while admitting no wrongdoing. Regulators had accused him of making false claims to donors, including saying donations to a police charity would be used to benefit families of slain troopers.

Gelvan remains barred from soliciting for charities or profiting from charity fundraising in New York.

Newspaper report triggers investigation and fine for charity consultant 04/23/14 [Last modified: Wednesday, April 23, 2014 9:56pm]

© 2014 Tampa Bay Times

PART 9
Lawmakers agree on legislation to crack down on fraud by Florida charities
by Steve Bousquet, Times/Herald Tallahassee Bureau

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Tuesday, April 29, 2014 6:48pm

TALLAHASSEE — The Senate and House struck agreement Tuesday on legislation to crack down on fraud by Florida charities after agreeing to drop a proposed $50 application fee for criminal background checks on solicitors.

Instead, taxpayers will pay for the background checks.

The legislation is the most significant tightening of the laws overseeing charitable solicitations in Florida in two decades and is a rare case of increased government regulation by a pro-business, free market-oriented Republican Legislature.

Agriculture Commissioner Adam Putnam has called Florida "a destination of choice for hucksters," and lawmakers embraced his call for new laws after reading an investigation by the Tampa Bay Times and the Center for Investigative Reporting called "America's Worst Charities," which exposed rogue charities that pocketed millions of dollars in profits under the pretense of raising money for veterans or sick children.

The legislation adds new reporting requirements for charities and bans them from Florida if they've been cited for fraud or other crimes in other states. Charities that raise more than $500,000 a year must have their financial statements reviewed by auditors and charities that collect more than $1 million must be audited.

Charities that raise $100,000 in response to a disaster, such as a hurricane, tornado or wildfires, must file quarterly reports with the state.

"It adds a lot of transparency and accountability," said Rep. Jim Boyd, R-Bradenton, sponsor of the House bill. "It holds people accountable who are acting inappropriately. The news stories were instrumental in breaking open the issue."

The House version (HB 629) included a $50 individual application fee, but Boyd said Gov. Rick Scott's office raised objections to the new fee, so it was taken out when the bill came up on the Senate floor Tuesday afternoon.

"I personally felt that the fees were reasonable, and we have fees attached to a lot of other business services in Florida," Boyd said. "But certainly if he felt there was a need to take it out for the good of the cause, I support that, because the bottom line is that we get our hands around the issues that have been created by these rogue charities."

Sen. Jeff Brandes, R-St. Petersburg, sponsor of the Senate bill, said that throughout the session, lawmakers have broadly tried to prevent new fees on consumers from being attached to any bills. "It's an ongoing concern," Brandes said.

The revised bill allocates about $416,000 from the state treasury to hire three full-time employees in Putnam's Department of Agriculture and Consumer Services to oversee the checks, which include mandatory registration and fingerprinting for people who work for telemarketing firms hired by charities to raise money.

Brandes emphasized that the background checks do not apply to people who serve without pay as volunteer fundraisers for charities.

The Senate is expected to pass the revised bill today and will send it for a final vote in the House, which will send it to Scott's desk.

Lawmakers agree on legislation to crack down on fraud by Florida charities 04/29/14 [Last modified: Wednesday, April 30, 2014 9:15am]

© 2014 Tampa Bay Times

PART 10
New law will give regulators more oversight of charities
by Kris Hundley, Times Staff Writer

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Sunday, May 25, 2014 9:21pm


SCOTT KEELER | Times (2013)This telephone line in the Iowa Attorney General’s office is answered by a staff member who records telemarketers’ pitches. The recordings can later be used to bring lawsuits against charities and telemarketers for making misleading statements.

Telemarketers with criminal backgrounds will no longer be able to call Floridians for charitable donations.

Nonprofits and professional solicitors banned in one state will be banned in Florida as well.

And consumers will be able to go online for more details about how a charity uses its donations under a bill Gov. Rick Scott is expected to sign into law.

Lawmakers proposed the sweeping changes following a yearlong investigation by the Tampa Bay Times and the Center for Investigative Reporting that ranked the worst charities in America based on which groups spent the most on professional solicitation companies. Of the 50 charities with the worst records, 11 were based in Florida, more than any other state.

With the reforms, Florida will have the tools to transform itself from one of the nation's most lax charity regulators to among the most aggressive. And because the rules apply to any organization that raises money in Florida, the impact of the changes could be felt nationwide.

Ken Berger, president and chief executive of Charity Navigator, an industry watchdog group, praised the changes, saying, "I'm in favor of anything that provides further enforcement and oversight to eliminate unethical and fraudulent behaviors."

The pending law gives Florida's Department of Agriculture and Consumer Services, which oversees more than 17,000 charities and 130 professional solicitors, additional manpower and stronger financial penalties for wrongdoers.

Three positions will be added, at a cost of about $415,000, to investigate charity-related complaints. Maximum fines will be increased to $5,000 for most violations and $10,000 for fraud.

The bill would also give Florida regulators the power to revoke a charity's state sales tax exemption for certain violations.

Bigger charities also will get additional scrutiny starting in July.

Under the new rules, charities with more than $500,000 in contributions will be required to have an independent certified public accountant review their finances; those with more than $1 million must publicly file an annual financial audit. Audits already are required by several states and give the public a more complete picture of a charity's finances, including related-party transactions, than its IRS filing.

All charities that raise donations in Florida would be required to file a financial statement that shows how much they spend on their mission. Any charity that raises more than $1 million but reports spending less than 25 percent on program services would be required to file additional information about salaries, travel expenses and fundraising costs.

The bill also gives regulators more time to check an applicant's record by extending the mandated turnaround time on annual registrations from 15 to 90 days. If the charity or fundraiser has had its right to solicit revoked in another state, Florida officials will be able to block the group from operating in Florida. Berger said he was not aware of any other state that had such a provision.

The Times/CIR report found at least a dozen cases where a charity or a solicitor had been forced out of one jurisdiction but continued operating elsewhere because state regulators don't systematically share information.

A spokeswoman for Agriculture Commissioner Adam Putnam's office said the department will rely on information from other states, as well as tips from media and charities to identify wrongdoers.

The bill also puts teeth into an existing law prohibiting people convicted of certain financial crimes from soliciting for charities.

Previously, employers were not required to do background checks of their employees. Under the new rules, such screening is mandatory for telemarketers who take donors' financial information.

Kris Hundley can be reached at khundley@tampabay.com or (727) 892-2996.

New law will give regulators more oversight of charities 05/25/14 [Last modified: Monday, May 26, 2014 8:35am]

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