Four states launch investigations into recurring giving tactics

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Four state attorneys general have begun examining the online fundraising practices of the two political parties, specifically seeking information on the use of pre-checked boxes to enroll contributors in recurring donation programs that have triggered a wave of fraud complaints and refund requests last year.

Attorneys General in New York, Minnesota, Maryland and Connecticut sent letters to WinRed, which processes online donations for Republicans, and ActBlue, its Democratic counterpart, requesting documents related to the practices, according to documents. courts and people familiar with the case. .

WinRed revealed the existence of the letter from the attorneys general in a filing with a federal district court this week, as the cabinet seeks to halt any state-level investigation, arguing that federal law should anticipate a such effort.

The letters were sent in late April, shortly after a New York Times investigation showed how Operation Trump unfolded – then obscured with foreign text – pre-checked boxes that automatically listed contributors in recurring giving programs, withdrawing money as often as every week. A second pre-ticked box removed what the campaign called a “money bomb” donation.

The practice sparked a wave of credit card fraud complaints, and Operation Trump ultimately paid back more than 10% of what it collected on WinRed in 2020 – $ 122 million. Operation Biden paid off a much smaller share of its 2020 online fundraising: 2.2%.

In a letter dated April 29, Letitia James, the New York attorney general, writing on behalf of the four attorneys general, explained to WinRed the scope of their request for documents. It included a request for any internal document that could have assessed the effectiveness and impact of recurring pre-checked boxes, data on conversion rates, “A / B testing” of its user interface as well as communications on its practices.

“News articles suggest that this practice has led to consumer complaints and refunds by WinRed,” Ms. James wrote, later adding: “Our offices have significant experience with precleared solicitations and other forms of marketing. of “negative option” among consumers. We believe that such solicitations can be inherently deceptive and lead consumers to make unwanted and unintentional purchases. “

WinRed included a copy of the letter in its federal complaint.

A person familiar with the Attorney General’s investigation said ActBlue received a corresponding letter.

In a statement, ActBlue acknowledged having received “a request from these attorneys general and worked with them to provide information responding to their request.” The information provided by ActBlue is unclear.

WinRed has so far resisted the request for documents, arguing in a June letter to attorneys general that oversight of its operations is a federal matter.

Representatives from the state’s four attorney general offices rejected this argument in a follow-up letter in June, writing: “The laws protect our residents from deceptive, unfair and fraudulent practices in soliciting contributions, including use of pre-checked boxes to trick donors into making recurring involuntary donations.

WinRed sought to frame the request for documents as part of a politically motivated investigation, first telling the Washington Examiner in a statement Thursday that the four attorneys general – all Democrats – “were exploiting their positions of power for partisan gain. “.

“It wasn’t until Republicans began to challenge Democrats’ long-standing advantage in online fundraising that these Democratic attorneys general became active,” the statement said. “It is disturbing to see these GAs attempting to use the power of their offices to help the Democratic Party.”

It appeared that WinRed was unaware that ActBlue had received a similar letter and request for documents. State attorneys general said partisanship had nothing to do with their investigation.

“Politics stops at the door, period,” said Delaney Kempner, spokesperson for Ms James.

Attorney General William Tong of Connecticut said, “We have launched this investigation to protect consumers, regardless of party affiliation, against an alleged unfair and deceptive marketing practice. WinRed is just one of the entities we are investigating.

And Raquel Coombs, spokesperson for Attorney General Brian Frosh of Maryland, said, “If WinRed hasn’t misled or deceived donors in our state, they have nothing to fear.”

The use of pre-checked boxes to automatically enroll donors in recurring donations has been the subject of much debate in political circles in recent months. Following the Times investigation, the Federal Election Commission in May unanimously recommended that Congress ban the practice, a rare bipartisan moment for an agency often plagued by partisan resentment.

Legislation has since been introduced in the House and Senate to prohibit the practice at the federal level, and state legislators in California have introduced a bill to do so in that state.

As of July 1, ActBlue informed Democratic campaigns and committees that it would now require any group on the platform that uses pre-checked recurring boxes to explicitly ask donors to give on a recurring basis.


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