Dearborn Fundraising Firm Hit With 35K Fine by Schuette

DEARBORN – A Dearborn-based professional fundraising firm has agreed to pay $35,000 for violating a state charity law.

Golden Recyclers, Inc., violated Michigan’s Charitable Organizations and Solicitations Act, according to Attorney General Bill Schuette. Besides the fine, the company must also revise labeling on clothing donation bins in Michigan 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,” Schuette said in a statement. “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 Detroit metropolitan area, Schuette added. 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. Most of the funds raised went to the fundraiser, and the bins failed to include the necessary legal disclosures.

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 Schuette’s office into the clothing donation bin operator following a consumer complaint.

The investigation revealed that the “Mercy” bins were unauthorized by Cancer Federation. The California charity responded by asking Golden Recyclers 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, Schuettel 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’s office to resolve the matter. Cancer Federation did not respond to Schuette, prompting him to bar the company from soliciting in Michigan.

Charitable Solicitation Resources and Complaints
To help Michigan residents decide which charitable donations to support, Schuette established an online searchable database for charities. The Attorney General also publishes an annual professional fundraising charitable solicitation report.

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 at ct_email@mi.gov.

Photo courtesy Michigan Attorney General's Office