Attorney General Corbett announces $400,000 multi-state action against consultant accused of deceptively promoting sweepstakes for PA and other charities
HARRISBURG - Attorney General Tom Corbett today announced a $400,000 multi-state settlement with a Massachusetts-based fundraising consultant accused of devising deceptive and misleading sweepstakes to boost donations for numerous charitable organizations located in Pennsylvania and 18 other states.
Corbett said the multi-state legal agreement was reached with the states against Newport Creative Communications Inc., 33 Railroad Ave., Duxbury, Massachusetts. In Pennsylvania, the Assurance of Voluntary Compliance agreement was filed in Commonwealth Court by the Attorney General's Charitable Trusts and Organizations Section. The business is accused of violating the state's Charitable Solicitation Law and Consumer Protection Law.
Investigators said Newport Creative Communications through 2005 conducted solicitations, often sweepstakes promotions, for more than 30 charitable organizations, including Pennsylvania-based Cancer Recovery-Foundation of America, Dauphin County; Cancer Recovery Foundation of America-Childrens Project, Dauphin County; and Save Our Sight, Franklin County.
The sweepstakes materials were designed to raise money for the groups' programs and services and were distributed to thousands of consumers through direct mail.
According to the legal action, the sweepstakes solicitations falsely implied that each consumer was the winner of $5,200-$6,500 cash prize. The mailers encouraged consumers to return the apparent "winning" entry along with a donation to the charity named in the promotion. Consumers were told in the solicitation that the charity "generously paid" for the cash prize. Those who returned the "CONFIRMATION/ENTRY FORM" sweepstakes document typically included a donation of $5-$10.
"Our investigation found that the sweepstakes contained deceptive phrases and insinuations that likely convinced every consumer that he or she had already won the cash prize or was close to winning," Corbett said. "In reality, there was only one pre-selected winner in the thousands of sweepstakes entries mailed out. Even more deceptive, if the consumer who received the winning entry failed to submit the confirmation form, then the cash prize was never awarded."
Corbett said Newport Creative Communications is accused of deceiving or misleading consumers by using the following false statements:
"Very positive news for you Mr. Smith! $6,000 cash payment to be confirmed upon reply by deadline. Payment schedule enclosed."
"A total of $6,000 has been approved for payment."
"Cash payment to be confirmed for Mr. Smith upon reply by deadline.
"Mr. Smith?I'm dumbfounded! Why haven't you claimed the $6,500 cash prize?"
"Ms. Smith YOU ARE OUR $6,000 WINNER it's as simple as that. There are absolutely no strings attached. Just send in your $6,000 Award Claim Form and then watch your mailbox for the $6,000 prize."
In addition, the states claim that the company engaged in other deceptive practices including:
Use of official-looking stamps including those that stated "Prize Notification Selection."
Enclosing a "draft press release" tailored to the mail recipient seeking his/her approval.
Representing that the mailing is from or that the prize will be handled by fictitious departments within an organization such as "Prize Administration Department," "Prize Processing Supervisor," or a "Sweepstakes Distribution Officer."
Providing a "Winner March Number" that contains the consumers' "match number," misleading consumers to believe that their number may be the winning number.
Using a window envelope design that exposes what appears to be a check inside along with the language, "Great news! Check inside," implying that the recipient has already won.
Indicating that security measures have been "enhanced" for "winner confirmation processing" or that the information is "confidential" or "expedited."
Representing that failing to respond has "serious consequences."
Implying that one of the documents included in the packet is a "tax document."
"This agreement changes forever the way this company will conduct fundraisers in the future," Corbett said. "In Pennsylvania, consumers are typically generous with their charitable donations and should never be deceived or misled into giving by phony promises of cash prizes."
Newport Communications denies the states' allegations and has agreed to the following in future solicitations:
Comply with the states' charitable solicitations laws and consumer protection laws.
Cease creating sweepstakes or mailings that falsely represent that the recipient has won, is about to win or is guaranteed to win a prize.
Cease using a payment schedule that falsely implies that the recipient will be receiving a prize on a certain date.
Cease misrepresenting that a governmental entity played some role in approving or originating the mailing or that the mailing was expedited or given a higher degree of attention or protection.
Honor sweepstakes official rules and only promote sweepstakes that award a prize at random if the pre-selected entry is not submitted.
The company is also required to include in each mailing, an insert that clearly and conspicuously informs consumers that: they have not won a prize; entry into the contest is free; donating will not increase their chances of winning; and what the odds are of winning the contest. Newport Creative Communications is also required to set up a policy for honoring consumers' requests to be removed from the company's active mailing list.
Under the terms of the agreement, the company will pay $400,000 to the states for restitution, attorney's fees, investigation costs or public protection purposes. Pennsylvania's share is $26,000. The Commonwealth will release $10,000 of that amount to charities that engage in similar activities as those mentioned in the sweepstakes contest and the remaining $16,000 will be spent on civil penalties and investigation costs.
The Commonwealth's case was negotiated by Deputy Attorney General Michael T. Foerster of the Attorney General's Charitable Trusts and Organizations Section in Harrisburg.
The following charities used Newport Communications Sweepstakes to solicit donations:
Cancer Recovery-Foundation of America, P.O. Box 238, Hershey, PA
Cancer Recovery Foundation of America-Childrens Project, P.O. Box 238, Hershey PA
Save our Sight Foundation, P.O. Box 574, Blue Ridge Summit, PA
American Foundation for Disabled Children Inc. 84 New Dorp Plaza, Suite 207, Staten Island, NY
American Breast Cancer Foundation 1055 Taylor Avenue, Suite 201A, Baltimore, MD
Cancer Foundation for Melanoma Research P.O. Box 399, Falling Waters, WV
Childhood Leukemia Foundation 1608 Route 88 West, Suite 203, Brick, NJ
Committee for Missing Children 242 Stone Mountain St, Lawrenceville, GA
Defeat Diabetes Foundation, Inc. 501 150th Avenue, North St. Petersburg, FL
Disabled & Retired Police Officers Education Fund 222 Government Avenue, Suite C, Niceville, FL
Firefighters Charitable Foundation 92 Beach Street, Westerly, RI
Foundation for Children with Cancer (Reach Our Children) 12166 Old Big Bend, Suite 311, MO
Huntington's Disease Society of America 158 West 29th Street, 7th Floor, New York, NY
Israel Children's Cancer Foundation 505 8th Avenue, Suite 803, New York, NY
Kids Wish Network 160 Scarlet Blvd, Oldsmar, FL
Little Shelter 33 Warner Road, Huntington, NY
Miracle Flights for Kids 2756 N. Green Valley Parkway #115, Green Valley, NV
National Association for the Terminally Ill 747 Mt. Eden Rd, Shelbyville, KY
National Cancer Center Inc. 88 Sunnyside Blvd, Suite 307, Plainview, NY
National Cancer Coalition 757 St. Charles Ave, Suite 202, New Orleans, LA
National Caregiving Federation 801 N. Pitt St #116, Alexandria, VA
National Emergency Medicine Association: National Alzheimer's Council 306 W. Joppa Rd, MD
National Emergency Medicine Association: National Heart Council 306 W. Joppa Rd, MD
National Missing Children's Locate Center no address
Opportunities for the Blind P.O. Box 98, Fairplay, MD
United Society for Family & Children 747 Mt. Eden Rd, Shelbyville, KY
U.S. Deputy Sheriffs' Association 1304 Langham Creek, Suite 324, Houston, TX
U.S. Municipal Police Association 1304 Langham Creek, Suite 324, Houston, TX
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