The Department of Justice is charging three Utah-based firms and their owner with waging deceptive and illegal telemarketing campaigns pitching movies and soliciting for donations, including calls to more than 16 million phone numbers on the National Do Not Call Registry.
The Federal Trade Commission (FTC) charged that the companies and their owner, Forrest S. Baker III, committed multiple violations of the FTC Act and the Telemarketing Sales Rule, and deceived customers about where the proceeds from their purchases and their donations would go.
According to the FTC’s complaint, Baker controls a group of Utah-based companies that produce and market films and DVDs and solicit contributions from consumers nationwide, including Feature Films for Families, Inc., Corporations for Character, L.C., and Family Films of Utah.
The complaint states that in 2008 and 2009 the defendants conducted a nationwide calling campaign under the name “Kids First,” in which they offered to send two complimentary DVDs and requested feedback on whether the movies should be included on a list of recommended movies. However, the defendants did not disclose that consumers who agreed to participate would later receive calls pitching DVDs produced by the defendants.
Moreover, the defendants’ telemarketers allegedly told consumers that “all of the proceeds of this fundraiser will help us finish up creating this recommended viewing list to help parents and grandparents, like us, with a list we can trust.” In fact, the organization responsible for the Kids First recommended viewing list, the Coalition for Quality Children’s Media, did not receive all the proceeds.
The complaint alleges that the defendants kept at least 93 percent of the DVD sales proceeds.
The FTC also alleges that, between 2009 and 2010, the defendants conducted fundraising campaigns for organizations with names related to fraternal orders of police (FOPs) and firefighters. The defendants receive most of the donations raised by these campaigns, and the organizations retain only 15 to 33 percent.
