New Jersey Division of Consumer Affairs Issues Warning to Organizations Soliciting Charitable Donations for Hurricane Sandy Victims

NEWARK – Attorney General Jeffrey S. Chiesa and the New Jersey Division of Consumer Affairs today issued a warning to individuals and groups seeking to solicit donations for the benefit of New Jerseyans affected by Hurricane Sandy: In order to comply with New Jersey’s laws, all charitable solicitation in New Jersey must conform to the State’s Charities Registration and Investigation Act, and the Consumer Fraud Act.

“New Jersey has seen a proliferation of organizations that claim to solicit funds to benefit those who faced losses as a result of Hurricane Sandy,” Attorney General Chiesa said. “The Division of Consumer Affairs is reaching out to each of these, to ensure they are aware of the requirements state law places on charities, to ensure their honesty and integrity. Make no mistake: In addition to outreach, we are investigating to identify any so-called charity that deceives the public. We will use the State’s full power to put un-charitable profiteers out of business.”

The Division of Consumer Affairs has identified dozens of organizations that have not yet registered with the State as charitable organizations, but are soliciting donations in New Jersey on behalf of Sandy victims. The Division is communicating with these organizations, in order to gauge their compliance with the State’s regulation requirements, and seeks to bring them into compliance as required. The Division offers the guidance of its Charities Registration Unit, to provide any clarification or advice an organization may need. In addition, Consumer Affairs investigators have commenced investigations into certain organizations to identify possible violations of New Jersey’s consumer protection laws.

“The Division of Consumer Affairs is investigating these organizations because we know charlatans will seek to use tragic events to enrich themselves – and because even honest organizations may need guidance in order to come into full compliance with our consumer protection laws,” Eric T. Kanefsky, Acting Director of the New Jersey Division of Consumer Affairs, said. “While we act to protect the public, we urge consumers to protect themselves. Our message to ‘Investigate Before You Donate’ has never been more important. Contact the Division of Consumer Affairs in order to learn all you can about a charity – including whether it has registered with the State – before you part with your hard-earned money.”

Attorney General Chiesa noted that the Division of Consumer Affairs demonstrated its commitment to protecting New Jerseyans against fraud in the wake of Hurricane Sandy in its lawsuit successfully blocking an allegedly fraudulent “Hurricane Sandy Reconstruction Summit” (press release: www.njconsumeraffairs.gov/press/12112012.htm). Other recent State actions include the Division’s lawsuits against 24 hotels and gas stations accused of price gouging desperate consumers during the period immediately after the storm; the State’s action resulting in the free return of vehicles that had been towed from Seaside Heights by a tower accused by consumers of predatory practices; and the Division’s announcement with the Motor Vehicle Commission of a database to help consumers identify whether a used car sustained flood damage.

New Jersey’s Charities Registration and Investigation Act, N.J.S.A. 45:17A-18 et seq. and New Jersey’s Consumer Fraud Act protect the public from fraud and deceptive practices. The Charities Act ensures that all charitable fundraising is conducted with transparency, and requires that organizations provide accurate, truthful information when soliciting donations from the public.

Among other requirements under the Charities Registration and Investigation Act, all charities that solicit funds in New Jersey must register with the Division of Consumer Affairs, and re-register annually, unless specifically exempted by the statute. Registered charities must provide detailed information about their operations and fundraising activities. They must detail the charity’s annual income and expenses, including the amount spent each year on actual charitable programs, as opposed to the amount spent on fundraising or management costs.

Certain religious and educational organizations, municipalities, and charities whose annual income includes less than $10,000 in public contributions and fundraising, are exempt from the registration requirement. However, those organizations are still required to provide accurate and truthful information when soliciting donations from the public.

If a business claims to donate any proceeds to charity, it must have a contract with a charity that is in compliance with New Jersey’s charities law. The contract must spell out the specific terms under which sale proceeds will be donated.

Advice for Consumers
The Division of Consumer Affairs, through its “Investigate Before You Donate” campaign, encourages New Jersey consumers to learn as much as possible about any charity before deciding to make a donation.

Consumers should:

Find out whether the charity is registered in New Jersey, or is exempt from having to register. (Certain religious and educational organizations, and charities whose annual income includes less than $10,000 in public contributions and fundraising, are exempt from having to register with the State.)

Find out how much the charity spent during recent fiscal years on program costs, management costs, and fundraising.

Learn about the charity’s stated mission.
Consumers may obtain information about a charity in several ways. They can ask the charity itself (reputable charities encourage you to do so), or visit the charity’s website.

Consumers can also obtain this information from the New Jersey Division of Consumer Affairs. Visit the Division’s Charities Registration page; call the Division’s Charities Hotline at 973-504-6215 during regular business hours; or use the Division’s free “New Jersey Charity Search” smartphone app.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.