Women's Cancer Fund: The FTC and 10 States Shut Down a Sham Charity's Phone Solicitations

The bottom line: a charity is responsible for what its paid telemarketers tell its donors.

Here is what happened

The complaint was filed in the U.S. District Court for the Southern District of Texas (case no. 4:24-cv-00881). The state plaintiffs were California, Florida, Maryland, Massachusetts, North Carolina, Oklahoma, Oregon, Texas, Virginia and Wisconsin, through their attorneys general (AGs) and/or secretaries of state. The complaint alleges:

• Fundraisers told prospective donors that their gifts would "help save lives" and "directly help patients with basic living expenses."
• Between 2017 and 2022, the charity collected $18 million from tens of thousands of donors but spent only $194,809 on financial support to cancer patients.
• It paid Anderson $775,139, nearly four times what it gave to all the patients it supported.
• About 85% of the money went to for-profit fundraisers Anderson had hired to make deceptive pitches.
• The charity also sent deceptive solicitation letters, often signed by Anderson.

The FTC had sued two of the charity's fundraisers, Associated Community Services and Directele, in 2021. The complaint alleges that those actions did not deter Anderson, who hired other fundraisers to make similar claims.

The plaintiffs charged violations of the FTC Act, the Telemarketing Sales Rule (TSR) and state consumer protection laws.

"Cancer Recovery Foundation International and Anderson abused the generosity of American donors in the most egregious way," said Samuel Levine, then Director of the FTC's Bureau of Consumer Protection.

Read the FTC and states' complaint against Women's Cancer Fund.

The order

On December 17, 2024, the court issued a stipulated order against the charity. It:

1. Permanently bans the charity from fundraising or receiving any benefit from soliciting contributions.
2. Orders it to permanently cease doing business, with no reinstatement or reformation.
3. Imposes an $18,250,000 judgment, suspended based on its sworn financial statements.

The law in plain English

The TSR covers telemarketing calls that solicit charitable contributions. It prohibits misrepresenting how donations will be used, including what percentage goes to the charitable purpose. A charity that hires telemarketers can be liable for their misrepresentations, and the telemarketers can be liable too. States enforce their own charitable solicitation and consumer protection laws in addition to the FTC.

What this means for you

1. Charities: approve and monitor every fundraising script.
2. Fundraisers: do not make program claims the charity's records can't support.
3. Track how much of each donation actually reaches the program.
4. Treat a prior enforcement action against your vendor as a reason to stop, not to switch vendors and continue.