A lawsuit seeking class-action certification has been filed in Cuyahoga County Common Pleas Court against Bath Twp.-based InfoCision Management Corp.
The second-largest privately held teleservices firm in the country was the focus of a Bloomberg Magazine report earlier this month, which was published in the Akron Beacon Journal and other newspapers nationwide and was featured on NBC’s Today show.
The lawsuit was filed by Elk & Elk Co., an Ohio law firm headquartered in Mayfield Heights which on its website says that it specializes in personal injury lawsuits. The suit says InfoCision “intentionally misrepresents to potential donors how much of their contribution will reach those in need.”
In one instance referenced from the Bloomberg report, the suit says in a 2011 contract with the American Diabetes Association, it was estimated that InfoCision would raise $4.6 million in revenues for the charity and retain $3.9 million or 85 percent, leaving 15 percent for the charity. The suit also refers to part of the story that said scripts instructed telemarketers to represent to donors that “about 75 percent of every dollar goes directly to serving people with diabetes and their families.”
InfoCision Chief of Staff Steve Brubaker said the company disputes the Bloomberg report, calling it “misleading and false. Anything based on that [such as the Elk & Elk lawsuit], we would have the same opinion.” Brubaker said Friday he had not read the lawsuit and the company would be reviewing it with its legal team.
In a letter to the editor published in the Beacon Journal after the Bloomberg story appeared, Brubaker said the company supports charities’ missions by “carrying the majority of the costs of fundraising for them. InfoCision does not keep the money raised. Nothing could be further from the truth.”
Bloomberg through a spokeswoman said “we stand by our reporting.”
The lawsuit’s plaintiff is Dora Oatman of East Cleveland, who received phone calls from InfoCision on behalf of the American Diabetes Association, American Cancer Society and the American Heart Association and donated to the charities.
The suit is seeking class-action certification for anyone nationwide who during the last four years either: (1) received a call from Infocision on behalf of a charitable organization; (2) was told by an InfoCision representative that a greater percentage of their donation would go to the charitable organization than what the charitable organization actually received or will receive, and (3) transferred money either directly to the charitable organization or to InfoCision to be donated.
Elk & Elk partner Jay Kelley, a co-counsel for the plaintiff, said the firm believes “an injustice occurred with how they induced these individuals to make donations. The real sad thing is there are two groups. Charities didn’t get all of the money individuals wanted to go to them and individuals obviously had no idea a large portion of what they were donating was going to someone’s profit line.”
Kelley said the firm, with offices around the state, ran ads seeking potential victims in the Akron Beacon Journal and Cleveland Plain Dealer.
At least one other law firm says it is investigating InfoCision following the story. Sarraf Gentile LLP, a firm in New York which says it specializes in a wide variety of litigation, including class actions, has issued a press release saying it is looking for information about InfoCision and will talk to people who donated money to InfoCision. A lawyer with the firm declined to comment on the ongoing investigation.