FTC Accuses Telemarketer of Deception

A telemarketing firm hired by a controversial charity purporting to raise money for disabled firefighters is being sued by the Federal Trade Commission for deceptive fund-raising practices.

North American Charitable Services, which the Foundation for Disabled Firefighters employed to solicit donations, is accused by the FTC of telling potential donors it’s associated with police and fire departments when in fact it isn’t.

“The donors who in good faith gave to disabled firefighters, their charitable intentions have been frustrated,” said Tracy Thorieifson, an attorney with the FTC, which filed the suit late last year. “The consumers are the big losers.”

On Wednesday, the former head of the disabled firefighters’ foundation filed a separate suit accusing the current leadership of donating only a fraction of its proceeds to people in need. The ex-managing director, Michael Kowalski, alleges that the foundation raised $1.9 million last year but spent only $2,000 on charity.

The foundation’s current president, however, strongly rejected the charges in an interview Thursday.

Michael Estrada, one of the defendants named in Kowalski’s suit, said he was brought into the organization because of his 25 years’ experience as a firefighter in San Bernardino County.

He said he was used as a “poster boy” for the foundation, which he said had no firefighters on its staff or board until he arrived in April 1997.

According to Estrada, he soon discovered that the foundation was giving very little of the money it collected to disabled firefighters. He said he’s tried to change the organization, including ousting Kowalski.

Estrada said the foundation provided him with a monthly stipend ranging from $200 to $400 in 1996 while he recovered from cancer treatment.

“I am the only recipient that I know of,” he said. “And my personal feeling is that they latched on to me because of my background as a firefighter.”

The latest developments shed light on a charity whose fund-raising practices have drawn complaints from fire departments across the county for years.

In 1994, for example, the Garden Grove Fire Department warned residents about what it called “unauthorized solicitations” made on behalf of the department by telemarketers using the foundation’s name. The department also accused solicitors of being abusive when potential donors balked.

The foundation is not named in the suit by the FTC. Rather, government attorneys are focusing on North American Charitable Services, which was contracted by the foundation to solicit donations.

According to the FTC lawsuit, little of the money solicited by North American went to charitable causes. The company, however, represented many charitable organizations, including the Foundation for Disabled Firefighters, the Regular American Veterans, Handicapped Children’s Services of America and Adolescent AIDS Foundation.

But North American’s attorney, Robin Moest, said the company has always operated ethically. Moest said the firm actually subcontracts telemarketing services to other companies and does not employ its own telephone operators.

“There is the possibility that some of the people who operate the phones misbehaved,” Moest said. “Telephone solicitors are paid on commission, and when you have people paid on commission, something always happens.”

Since the FTC lawsuit was filed, Moest said North American has begun “comprehensive monitoring programs” to avoid mishaps.