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Crackdown on Four Sham Cancer Charities

Rutledge Joins State and Federal Crackdown on Four Sham Cancer Charities

Tue, May 19, 2015

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced that she has joined with the U.S. Federal Trade Commission (FTC) and other state officials from across the country in a complaint charging four sham cancer charities and their operators with defrauding and stealing more than $187 million from consumers.

The so-called charities told donors their money would go to help cancer patients, including children and women suffering from breast cancer, but the overwhelming majority of the donations benefitted only the perpetrators, their families, friends and fundraisers.

“Anytime an Arkansan makes a donation to a cause, they should have full confidence that the money will be used for its intended purpose,” said Attorney General Rutledge. “Unfortunately, con artists have discovered that a quick and easy way to make money is by posing as charities. These four charities targeted donors in every state, and misrepresented the scope and nature of their charitable programs in order to benefit themselves and close friends.”

Named in the federal court complaint are Cancer Fund of America Inc., Children’s Cancer Fund of America Inc., Cancer Support Services Inc., The Breast Cancer Society Inc., James Reynolds Sr., Kyle Effler, Rose Perkins and James Reynolds Jr.

Children’s Cancer Fund of America, the Breast Cancer Society, Effler, Perkins and Reynolds, Jr. have agreed to settle the charges against them. Under the proposed settlement orders, the settling individual defendants will be banned from fundraising, charity management and oversight of charitable assets, and Children’s Cancer Fund of America and The Breast Cancer Society will be dissolved. Litigation will continue against Cancer Fund of America, Cancer Support Services and Reynolds Sr.

According to the complaint, the defendants made misleading and deceptive statements through telemarketing calls, direct mail and websites. The defendants portrayed themselves as legitimate charities with substantial programs providing direct support to cancer patients in the U.S. Defendants claimed to provide patients with pain medication, transportation to chemotherapy and hospice care. These claims were deceptive and according to the complaint, the charities “operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation, with none of the financial and governance controls that any bona fide charity would have adopted.”

The complaint goes on to say that the defendants used the organizations for lucrative employment for family members and friends, as well as spent consumer donations on cars, trips, luxury cruises, college tuition, gym memberships, jet ski outings, sporting and concert tickets and dating site memberships. The charities hired professional fundraisers, who often received 85 percent or more of every donation.

In order to hide their high administrative and fundraising costs from donors and regulators, the defendants falsely inflated their revenues by reporting in publicly filed financial documents over $223 million in donated “gifts in kind,” which they claimed to distribute to international recipients. However, the defendants were merely pass-through agents for such goods. By reporting the inflated “gift-in-kind” donations, the defendants created the illusion that they were larger and more efficient with donors’ dollars than they actually were. Arkansas and 35 other states alleged that the defendants filed false and misleading financial statements with state charities regulators.

In addition, the FTC, Arkansas and 35 other states have charged Cancer Fund of America Inc., Children’s Cancer Fund of America Inc. and The Breast Cancer Society Inc. with providing professional fundraisers with deceptive fundraising materials.

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May Mobile Office Locations

Rutledge Announces Mobile Office Locations for the Remainder of May

Tue, May 19, 2015

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced mobile office locations for the remainder of the month of May.

Attorney General Mobile Offices assist constituents who are having consumer issues and help them file consumer complaints against scam artists. Staff will also be available to answer questions about the office and the other services it offers to constituents.

Rutledge created the initiative so that the office would be accessible to everyone, not just those that call the capital city home. Arkansans should know that the Attorney General believes there is no issue too small for her staff to have a face-to-face conversation.

For more information about services provided by the Attorney General’s Office, visit ArkansasAG.gov or call (501) 682-2007. Rutledge can also be found on Facebook at facebook.com/agleslierutledge and on Twitter at twitter.com/agrutledge.

Attorney General Mobile Offices schedule can be found below:

Waldron

Thursday, May 21

9 – 11 a.m.

Waldron City Hall, Council Room

370 Featherston St.

Waldron, AR 72958

Fort Smith

Thursday, May 21

12:30 – 3:30 p.m.

Fort Smith Public Library

3201 Rogers Ave.

Fort Smith, AR 72903

Searcy

Tuesday, May 26

9 a.m. – noon

Carmichael Community Center, Room #1

801 S. Elm St.

Searcy, AR 72143

Jacksonville

Tuesday, May 26

1:30 – 3:30 p.m.

Jacksonville City Hall, Council Chambers

1 Municipal Drive

Jacksonville, AR 72076

Piggott

Friday, May 29

9 – 11 a.m.

Clay County Courthouse, Courtroom

151 S. 2nd Ave.

Piggott, AR 72454

Pocahontas

Friday, May 29

12:30 – 3:30 p.m.

Pocahontas Community Center, Room #1

300 Geneva Drive

Pocahontas, AR 72455

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Peace Officers Memorial Day

Rutledge Marks Peace Officers Memorial Day

Fri, May 15, 2015

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today attended the Arkansas State Police Memorial Service for troopers who died in the line of duty. Rutledge issued a statement in recognition of Peace Officers Memorial Day after the event.

“The tragic death of a Johnson County deputy last night is a solemn reminder of the serious dangers police officers put their lives in to serve and protect,” said Attorney General Rutledge. "My thoughts and prayers go out to the family of the fallen officer, his fellow officers and the people of Johnson County.

“I was proud to join law enforcement officers this morning to pay tribute to the men and women who have served as Arkansas State Troopers and given everything for the safety of our communities. During National Police Week and on Peace Officers Memorial Day, I encourage all Arkansans to thank the men and women who humbly wear the badge so that we may sleep a little easier at night. As Arkansas’s chief law enforcement officer, I salute our officers and thank them for their bravery, dedication and sacrifice.”

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Mobile Office for Lonoke and Prairie Counties

Rutledge Announces Mobile Office for Lonoke and Prairie Counties

Thu, May 14, 2015

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced mobile office locations for Lonoke and Prairie counties to be held on Tuesday, May 19.

Attorney General Mobile Offices assist constituents who are having consumer issues and help them file consumer complaints against scam artists. Staff will also be available to answer questions about the office and the other services it offers to constituents.

Rutledge created the initiative so that the office would be accessible to everyone, not just those that call the capital city home. Arkansans should know that the Attorney General believes there is no issue too small for her staff to have a face-to-face conversation.

For more information about services provided by the Attorney General’s Office, visit ArkansasAG.gov or call (501) 682-2007. Rutledge can also be found on Facebook at facebook.com/agleslierutledge and on Twitter at twitter.com/agrutledge.

Attorney General Mobile Offices schedule for Tuesday, May 19:

Lonoke

9 a.m. – noon

Lonoke Community Center, Community Room

1355 Front St.

Lonoke, AR 72086

Des Arc

1 – 3 p.m.

Des Arc City Hall, Council Chambers

107 South 3rd St.

Des Arc, AR 72040

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Restitution for Victims of Mobile Cramming

Rutledge Announces Restitution for Victims of Sprint and Verizon Mobile Cramming

Tue, May 12, 2015

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced that she, along with 49 other state attorneys general, the District of Columbia, the Consumer Financial Protection Bureau (CFPB) and the Federal Communications Commission (FCC) have reached settlements with the Sprint Corp. and Cellco Partnership, also known as Verizon Wireless.

Under the terms of the settlements, Sprint will pay $68 million and Verizon will pay $90 million to resolve allegations that both companies placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumers, a practice commonly referred to as “mobile cramming.” Arkansas will receive $153,176 from Sprint and $204,260 from Verizon.

Of the settlement amounts, Sprint and Verizon are required to provide $50 million and $70 million, respectively, to consumers who were victims of cramming. Sprint and Verizon will each distribute refunds to harmed consumers through redress programs that will be under the supervision of the CFPB. Sprint will also pay $12 million to the attorneys general and $6 million to the FCC, and Verizon will pay $16 million to the attorneys general and $4 million to the FCC.

“In Arkansas, approximately 108,000 Sprint customers and approximately 211,500 Verizon customers will be eligible to receive restitution under this settlement,” said Attorney General Rutledge. “This settlement is an important victory for the current customers of Sprint and Verizon who can now seek restitution, but also a critical step in protecting current and future customers from being taken advantage of by these cramming charges.”

Consumers who have been “crammed” often have charges, typically $9.99 per month, for “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores that the consumers have never heard of or requested.

Consumers can submit claims under the redress programs by visiting SprintRefundPSMS.com and/or CFPBSettlementVerizon.com. These websites will provide information about refund eligibility, how to obtain a refund and offer guidance on requesting a free account summary that details PSMS purchases on their accounts. Consumers who have questions about the redress programs can visit the program websites or call the settlement administrators at (877) 389-8787 (Sprint), and/or (888) 726-7063 (Verizon).

The settlements, like the settlements entered into by AT&T and T-Mobile in late 2014, require Sprint and Verizon to stay out of the commercial PSMS business — the platform to which law enforcement agencies attribute the lion’s share of the mobile cramming problem. Under each of the four settlements, the carriers, including Sprint and Verizon, must also take a number of steps designed to ensure that they only bill consumers for third-party charges that have been authorized, including:

  • The carriers must obtain consumers’ express consent before billing consumers for third-party charges, and must ensure that consumers are only charged for services if the consumers have been informed of all material terms and conditions of their payment.
  • The carriers must give consumers an opportunity to obtain a full refund or credit when they are billed for unauthorized third-party charges.
  • The carriers must inform their customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and must inform consumers of how those third-party charges can be blocked if consumers do not want to use their phone to pay for third-party products.
  • The carriers must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from the carrier’s own charges, and must include in that same section information about the consumers’ ability to block third-party charges.
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Additional Mobile Office in Benton County

Rutledge Announces Additional Mobile Office in Benton County

Fri, May 8, 2015

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced an additional mobile office location to be held in Benton County on Tuesday, May 12. In addition to the already scheduled office in Bella Vista, a mobile office will be held in Bentonville.

Attorney General Mobile Offices will assist constituents who are having consumer issues and help them file consumer complaints against scam artists. Staff will also be available to answer questions about the office and the other services it offers to constituents.

For more information about services provided by the Attorney General’s Office, visit arkansasag.gov or call (501) 682-2007.

Attorney General Mobile Offices schedule for Tuesday, May 12:

Bella Vista

9 a.m. – noon

Bella Vista City Hall

101 Town Center

Bella Vista, AR 72714

Bentonville

1 – 3 p.m.

Bentonville Public Library (Tate Haney Room)

405 S. Main St.

Bentonville, AR 72712

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