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Attorney general cracks down on false claims on clothing donation bins

Apr 7, 2017

Clothing donation bins operated by Houston, Texas-based A.T.R.S. are labeled with claims that 100% of the market value of every donation is given to the Michigan Humane Society. However, an investigation by the Michigan attorney general's office revealed that the company only passed on 6% of its revenues from sales of the donations to the charity, and pocketed 94%.

Bill Schuette's office has issued a notice against A.T.R.S., a for-profit clothing bin operator. The order alleges more than 300,000 violations for false labeling. Each violation carries a maximum penalty of $10,000. A.T.R.S. operates 251 clothing bins throughout Michigan. The attorney general's office found that in 2016, it brought in $835,000 in revenue, but only donated $49,000 to the Michigan Humane Society. 

The case came to the attention of the attorney general's office in the course of investigating another professional fundraiser, Golden Recyclers. When A.T.R.S. renewed its fundraising license, it reported that it had collected $50,000 for the Michigan Humane Society, but reported no campaign costs. The report seemed suspicious, so they began an investigation and found that A.T.R.S. failed to disclose hundreds of thousands of dollars of campaign costs, and that the stickers on its bins that claimed 100% of proceeds went to charity were deceptive.