Opening Statement * of JODIE BERNSTEIN

Director, FTC Bureau of Consumer Protection at a Press Conference on April 9, 1997

Every day across this country, police and firefighters put their lives on the line to protect and defend the families and businesses in their communities. And every day, unscrupulous solicitors exploit the gratitude of Americans to shake them down. The Federal Trade Commission, along with Attorneys General, Secretaries of State and other agencies that regulate charities from all 50 states, announce OPERATION FALSE ALARM. This is a law enforcement and public education campaign to stop con artists who solicit donations posing as representatives of local police and fire departments or other community service organizations, and help consumers and businesses know how to protect themselves. Unfortunately, in too many cases, the police or civic organizations never get the money solicited in their names, causing legitimate fundraising efforts to suffer.

The schemes vary. Often, telemarketers solicit consumers directly, perhaps stating that they’re raising money for the family of a fallen officer, or maybe to purchase bullet proof vests. In some instances, consumers may be told that when a donation is made, they would receive a decal to place in the window of their automobile and that they just might get special treatment if they were stopped by the police. In other instances, small businesses are asked to take advertisements in publications that are reportedly of interest to -- and widely distributed in -- the community, as a means of supporting the local police or fire departments or to support a drug abuse prevention, public safety or other worthy program. In most cases, the publications are not widely distributed, and small businesses who sign up once become the victim of relentless hounding for more advertisements and deceptive bill collection tactics. These scams prey on the protectors of public safety and the citizens who want to show support for them.

The FTC has brought five law-enforcement actions under OPERATION FALSE ALARM, with 21 states bringing a total of 52 more. Another 29 states are joining in the public education initiative. The FTC has filed suit in federal court against one company that engaged in deceptive fundraising tactics by routinely posing as law enforcement officers; representing that donations would benefit law enforcement agencies or firefighters or support particular causes; and that donations were tax deductible. The remaining cases involve companies that solicited small businesses to pay for "advertising" in their publications by falsely claiming that advertising proceeds would support local, civic organizations. Businesses who refused to advertise were nonetheless barraged with false invoices and other deceptive collection efforts.

In each of these cases, the FTC has asked the federal court for -- and obtained -- a temporary restraining order halting these schemes, asset freezes and the appointment of receivers to take charge of the companies.

With us today is Iowa Attorney General Tom Miller, who will speak to you as a representative of all 50 states and their participation in OPERATION FALSE ALARM.

Also with us today are Lt. Michael Edmonson, with the Louisiana State Troopers, whose trooper’s association had an unfortunate experience with a professional fundraiser --- and ---

Sgt. Eric T. Parker, of the Androscoggin County Sherrif’s Department, in Auburn, Maine, who investigated a rash of deceptive badge-related solicitations targeting small businesses in his community.

In addition, we will hear from Mr. Steve Miller, of West Columbia, South Carolina. Mr. Miller is a small business owner, and will relate his experience when his business was solicited to donate to a national police union.

In cooperation with the National Association of Attorneys General (NAAG), the FTC today launches a campaign to educate consumers and businesses about how they can avoid being scammed by phony badge-related solicitors. Four publications are now available -- a Consumer Alert and a fact sheet for businesses about public safety fund-raising appeals, a brochure for consumers about charitable donations, and a fact sheet for non-profit organizations considering hiring professional fundraisers. Additionally, 29 states** have joined in the consumer education campaign -- in a combined national effort to stop the ringing of these FALSE ALARMS. This information is available from each state’s Attorney General or Secretary of State’s Office, and also is available from the FTC’s Internet site at: www.ftc.gov

Badge-fraud schemes betray the public trust. And legitimate fundraising efforts by local police, firefighters and other community service organizations suffer as a result. The law enforcement actions we announce today and the consumer and business education campaign arising from OPERATION FALSE ALARM are designed to help consumers and businesses tell the difference between the COPS and the ROBBERS. Here are a few tips we offer:

1. Resist the urge to donate impulsively. Simply having the name "police" or "firefighters" in an organization’s name does not mean police or firefighters are members of the group. In fact, if the caller claims to be a police officer, beware. In many states and localities, police are prohibited from soliciting the public.
2. Call the organization or your local police or fire department to verify whether a fundraiser is, in fact, collecting on their behalf.
3. Do not feel intimidated by declining to donate and be wary if a fund-raiser suggests that you’ll receive special treatment for donating.
4. Most importantly, don’t stop giving......just be smart about it!

Although not offering prepared remarks this morning, I would like to acknowledge the presence of Ms. Margery Heitbrink, Vice President of the National Charities Information Bureau, and Mr. Bennett M. Weiner, Vice President and Director of the Philanthropic Advisory Service, National Council of Better Business Bureaus. In addition, I welcome Ms. Patricia F. Lewis, President and CEO of the National Society of Fundraising Executives. They have graciously offered to make themselves available at the conclusion of the opening statements to answer your questions. Also, a prepared statement from each is included in your package.

I will now introduce Iowa Attorney General Tom Miller.

I would like to introduce Lt. Mike Edmonson, of the Louisiana State Troopers

I am pleased to welcome Sgt. Eric T. Parker of the Androscoggin County Sherrifs Department, Auburn Maine.

Welcome to Mr. Steve Miller, of West Columbia, South Carolina.

*This may not be an exact transcript of Ms. Bernstein’s remarks.

**Those states not bringing enforcement or regulatory actions.