ChildHelp: Deception for a Good Cause?
In 2021, I made a donation to ChildHelp Inc. (“CHI”) at one of its fundraising tables. I thought I was making a one-time donation, but a few months later I found out that the charge was recurring monthly. After a little online sleuthing, I discovered that I was not the only one. I found at least 30 other consumers who faced the same deception. Many of them had received responses directly from CHI in response to their frustration.
A not-so-brief review of CHI’s filings with the IRS revealed that more than 2/3s of the revenue from in-person donations actually goes to a for-profit corporation. The top two executives receive over a million dollars a year in combined compensation. CHI also lost $2,000,000 to embezzlement and did not notice for years. I asked myself, “How much of each donation is actually going to the cause?” and “How many people will never give to a nonprofit again because CHI misled them?”
CHI could not answer these questions, so I resolved to use the judicial system to get some answers.
After countless hours and thousands of dollars spent on the case, CHI remained unapologetic and recalcitrant. CHI was evasive in discovery and asked the Court to keep their operations secreted away from the public eye.
Eventually, the Court dismissed our case because we could not pull together a class for the class action. “In so ruling,” the judge wrote, “the court is not condoning [these] fundraising activities, which the record strongly suggests are indeed deceptive.”
On February 15, 2024, the Colorado Court of Appeals overturned that decision and sent us all back to the district court to litigate the case further. That opinion can be found here. The Colorado Court of Appeals decided that the opinion in the case should be published. This brought the case the attention it deserved.
Business Den published an article, which can be found here, about the facts of the case. That article focuses on the nature of the claim and accountability in the nonprofit sector and is well worth a read. Law360 published an article, which can be found here, outlining the legal details of the case. That article hits at the unique legal aspects of the case, but is generally directed at attorneys.
This case highlights broader issues in the nonprofit sector, from executive compensation to embezzlement to accountability and transparency.
We have a lot more work to do in the district court, including interviewing other consumers affected by this practice, and will continue our efforts to advocate for transparency in the non-profit sector. In the meantime, you can help by simply directing your donations to local volunteer-led organizations and remembering that just because a corporation is tax-exempt and touts a good cause does not mean they will make good use of your donation.
Here are a few comments that others had for CHI:
1. One individual wrote the following on December 8, 2020: “I was asked if I was willing to help this foundation by donating a one time charge of $10.00. This is a great example of why I have a great distrust of non-profit organizations. I want to cancel all future contributions going forward” citing “Unauthorized Recurring charges.”
2. At least other consumers identified the same issue in the same thread.
3. One responding consumer stated “Having the same issue, want this monthly charge off my credit card!”
4. Another responding consumer stated “I am having this same issue right now. I just found out my credit card has been charged for 9 months straight.”
5. Another responding consumer stated “*** this organization. I find out through my banking app I had this as a recurring ‘donation’ -_-[.]”
6. The Defendant responded to all three consumers.
7. One consumer identifying their location as Denver wrote on December 20, 2021 “I decided to donate and I am literally, and figuratively, paying for my generosity. I was told I was making a one time donation. I have now learned that a company relying on donations for supposedly good deeds, though I find that hard to believe, will use disingenuous and predatory means to gather their revenue. It sickens me that this happens only to make people skeptical to donate in the future.”
8. The title for this consumer’s statement was “Non authorized recurring billing.”
9. The Defendant responded to this consumer.
10. Another consumer in Denver wrote on November 13, 2021 about “Unauthorized Credit Card Charges” stating “Wanted to help children in need so I agreed to a one time charge to purchase a backpack. They have been charging me $10 every month for no reason. Its despicable how this scam company uses children to steal from those just trying to help. How do you people sleep at night?”
11. The Defendant responded to this consumer.
12. Another consumer in Denver wrote on November 3, 2021 that the Defendant “Charged me monthly $10 for 6 mos w/o my knowledge” further stating “These people are scammers. I thought I was doing a one time donation for backpacks. I didn’t realize that they’ve been charging my credit card $10/mo for the past 6 mos! They should be ashamed of themselves. They are dishonest and next time they approach me at their table when I go into a Walgreens, I will not be donating anything. The kids suffer while they pad their fat paychecks. Disgusting!”
13. The Defendant responded to this consumer.
14. On October 14, 2021, an individual wrote the following about the Defendant: “I am currently deployed in Qatar and upon checking my checking account today, found out that I suddenly have a $10 charge that I DID NOT authorize. I have no idea how it even came to be. [¶] This sudden unauthorized charge is completely unacceptable given the fact I am DEPLOYED. [¶] I called the number provided and shown on the statement under my banking information and supposedly the number is not in service. There is a word for such nonsense and it starts with a B and end with a IT.”
15. The Defendant responded to this consumer.
16. Another consumer wrote the following on September 30, 2021: “I just saw I have a charge on my credit card that I didn’t authorize! What kind of scam us this? Encourages me to never give again.”
17. The Defendant responded to this consumer.
18. Another consumer wrote on September 16, 2021 that the Defendant is running an “Absolute Scam” describing the following experience: “After agreeing and donating more and more after being pushed into by the salesman who said it would be a one time charge I check my email only to see that it is a reoccurring charge monthly. I feel scammed and this company is disgusting for taking advantage of people just trying to do good.”
19. On August 27, 2021, another consumer wrote “I gave a one-time donation of $10.00 in Black Canyon City, Arizona. I have just discovered that my credit card has been charged monthly ever since. [¶] I was told this was a one-time donation and clearly the representative from this organization was dishonest with me. These charges must stop immediately and I must be refunded for all amounts charged to my credit card. […] A total of $90 was charged to my card.”
20. The Defendant responded to this consumer.
21. On August 12, 2021, another consumer wrote “About a month ago, I donated $10.00 to someone from ChildHelp outside a restaurant. He made no mention that my donation would be recurring, in fact, I am about 95% sure he said the words ‘one-time donation’. So to my surprise, I found I was charged $10.00 again by ChildHelp yesterday, exactly one month after the original charge. This clearly wasn’t some small mistake on their part, this was a recurring charge set up without my permission.”
22. The Defendant responded to this consumer.
23. Another consumer wrote on August 5, 2021 to “Please stop payment of $10 per month on my American Express card immediately. I no longer will to contribute to this ChildHelp organization. Thank you, Janell Peterson.”
24. The Defendant responded to this consumer.
25. A reviewer wrote on June 27, 2021 that she was “Scammed out of money” further stating that “This organization had a table set up in front of the UPS store and took a $21 and $10 donation from me by card and never mentioned that they were signing me up for a monthly donation. I received an email thanking me for signing up to give monthly. These people are scammers and forceful when they approach you. Do Not Trust Them!”
26. The Defendant responded to this consumer.
27. On July 16, 2021, a consumer wrote as follows: “Hello, I was shopping at a local mall one day and these women approached me asking for a donation in regards to child abuse. Ofc any humane person would donate to that cause but they had said it was only a one time payment yet I seen monthly payments being made to Childhelp. I would definitely like to see if I could get refunded my money, solely because I was unaware of it.”
28. The Defendant responded to this consumer.
29. A consumer in Phoenix, Arizona, wrote the following on June 1, 2021: “I was approached by a guy requesting a donation to buy a backpack and donate back to them for abused children. I told him I didn’t have cash; he said he could take debit or credit. So I made the donation. I’m reviewing my statement and see an additional $10.00 transaction processing a month after the original transaction. I called them and left a message, then called my bank to dispute the charge and cancel the transaction. The rep said they (ChildHelp) had me set up on recurring payments, which I did not authorize nor was ever requested by him! I blocked any further transactions.
30. The Defendant responded to this consumer.
31. A consumer wrote the following on April 28, 2021: “I bought a backpack for kids in need and have been charged $10 a month for about 9 months now without my knowledge or explicit permission. I have called and sent emails and would like a response and for this to be resolved ASAP. It’s absolutely disgusting that this organization would take advantage of people in such a way.”
32. The Defendant responded to this consumer.
33. On April 15, 2021, a consumer wrote about a “Scam – unauthorized charges” further stating “this is insane. I agreed for one charge of $10 for a donation and have been getting charged monthly ever since. I did not agree to this and that is a scam and untrustworthy[.]”
34. The Defendant responded to this consumer.
35. On March 4, 2021, a consumer wrote “Like everyone else here, I agreed to make a one-time donation and a month later discovered a second recurring charge. Nothing about this was mentioned to me during the transaction. [¶] I called ChildHelp’s number, but it went directly to voicemail. I will still try following up with them by e-mail. [¶] Based on what I have read here, it is clear that this was no mistake or miscommunication but a standard deceptive practice on the part of this organization. I have filed a dispute with my credit card company against the second, unauthorized charge, and they were also able to place a 15-month block against the merchant.”
36. The Defendant responded to this consumer.
37. On December 30, 2020, a consumer wrote “I donated some money to them some time back at Duncan Donuts as a one time donation. I have now seen monthly charges from this company on my card without authorization or any email or anything.”
38. The Defendant responded to this consumer.
39. On October 30, 2020, a consumer wrote “Tricking people in to monthly payments they don’t notice is apparently the whole model for this ‘charity.’ And of course there’s no obvious place or mechanism on their website to stop them from reaching into your pocket every month. Child Help is the kind of organization that gives charities a bad name.”
40. The Defendant responded to this consumer.
41. On September 3, 2020, a consumer wrote “Just like countless others on this platform have mentioned, stay away… They are a rip-off organization…” referring to “Unauthorized credit card charges.”
42. The Defendant responded to this consumer.
43. On May 6, 2020, a consumer in Denver wrote the following: “Same boat as everyone else here. I was approached outside of Chipotle, he asked for $10. I agreed, they took no information besides swiping my card and my signature for the $10. Nothing was ever mentioned about a monthly charge. I didnt see any agreement of any type other than the initial $10 charge. I am guessing this is not what the organization wants but I am sure they are rewarded better for getting memberships than for one time donations and that encourages this kind of deception. Usually when I hear people complain about stuff like this I think ‘Oh you just didnt read what you were signing, or you didnt pay enough attention to what they said!’ but nope… he was very clear that it was just a $10 donation (‘Can you spare $10’ is not the same as ‘can you spare $10 every month’). And there was nothing to read that would have told me otherwise.”
44. On May 1, 2020 a consumer wrote “Just realized this company has been charging my minors account since Dec for unauthorized charges. The charge in April said Childhelp and the Dec Jan Feb and March just said 10.00 withdrawal.”
45. The Defendant responded to this consumer.
46. On April 18, 2020 a consumer wrote “I have read through the comments below and am in the same boat for the most part. I was approached and asked for a donation. I said, ‘sure, I’ve got $10’. He then tried to ask for more to which I said, ‘How about that $10!’ There was NO MENTION OF RECURRING CHARGE. I thought it was all done until a couple of months later when I looked back at my charges and saw they had been charging me every month… I went to cancel, and it said I should receive an email to confirm… I never even gave them my email… Gonna be fun phone call. It makes me wonder if this money is even helping any kids or just going into some *** pocket.”
47. On April 14, 2020 a consumer wrote “You guys suck and I hate you” further stating “Your organization made me despise kids. You guys suck. I’m already broke and you’ve been charging me every month without my knowledge. *** you.”
48. On April 12, 2020 a consumer described the “Fraud” of the Defendant as follows: “just like the other reviews was approached at a local business to donate a one time payment of $10 to help children. Just noticed I have been charged $10 ever since. What a horrible way to prey on people just wanting to do some good. I love giving to charity but not under false pretenses.”
49. On April 7, 2020 a consumer stated the following: “Unfortunately, I’ve only found now through this website, but I’m running into the same issue where I’ve committed to a ONE-TIME donation via credit card and found out now that they’ve been charging me every month the same donation amount. I’m now waiting for their representative to call me back and cancel the recurring charge. Hopefully, they can make it as easy as they took my money.”
50. On March 31, 2020 a consumer wrote two reviews, one of which stated “I was approached by someone outside of my grocery store. Said that for just $30 I could supply a child with back to school supplies – like a backpack, pencils, notebook etc. As a former preschool teacher, this tugged on my heart strings and I was happy to pay the, as I was told, ONE TIME donation of $30. Going through my finances to see how I can save money, you know because I am out of a job like many others – COVID19, and I see that I am being charged $10 monthly by this company. Its been over 8 months… This is FRAUD! I cant believe how low some people will stoop. I wouldnt be surprised if this whole charity is a fraud and someone is just pocketing the money. All I have to say is..shame on you.”
51. On March 18, 2020 a consumer wrote “Recurring monthly charges were not authorized!” further stating “What a shame honest people cant help children with a backpack only. This company charged me recurring monthly charges of $10.00 for 3 months in a row before I realized what was happening. I have filed a claim with my bank and stopped them from taking anymore of my money!”