Four states begin inquiries about recurring donation methods


Four state attorneys general began looking into the online fundraising practices of both political parties, specifically seeking information about the use of preselected funds to register contributors to recurring donation programs that sparked a wave of fraud complaints and claims for refunds last year.

Prosecutors in New York, Minnesota, Maryland and Connecticut sent letters to WinRed, which handles online donations for Republicans, and ActBlue, her Democratic counterpart, demanded documents related to the practices, according to court documents and people familiar with the matter.

WinRed He revealed a letter from the attorney general was in a federal court filing this week, in which the company is seeking to stop any statewide investigation, arguing that federal law should preempt any such effort.

Messages were sent in late April, shortly after New York Times investigation Show how Trump’s operation spread – then obscured by strange text – Predefined boxes It automatically enrolled contributors to recurring donation programs, taking money more often each week. The second previously identified fund removed what the campaign called the donation a “financial bomb.”

The practice caused an increase in credit card fraud complaints, and Trump’s operation eventually recovered more than 10 percent of what it raised in WinRed in 2020 – $122 million. The Biden operation has taken back a much smaller share of online fundraising for 2020: 2.2 percent.

In a letter dated April 29, New York Attorney General Leticia James, on behalf of the four attorneys general, outlined to WinRed the scope of their request for the documents. It included a request for any internal documents that might have evaluated the effectiveness and impact of pre-set recurring boxes, data about conversion rates, and “A/B testing” of its user interface, as well as communications about its practices.

“News reports indicate that this practice has led to consumer complaints and refunds by WinRed,” Ms James wrote, later adding: “Our offices have significant experience with pre-verified requests for proposals and other forms of ‘negative choice’ marketing to consumers. We believe such requests can be misleading in nature, and lead to unintended and unwanted purchases by consumers.”

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

A person familiar with the attorney general’s investigation said ActBlue had received a matching letter.

In a statement, ActBlue acknowledged that it had received “an inquiry from these public defenders and worked with them to provide the information that responded to their inquiry.” It is not clear what information ActBlue provided.

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

Representatives of the four attorney general’s 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 donations, including the use of predetermined funds to corner donors from making unintended recurring donations.”

WinRed sought to frame the document request as part of a politically motivated investigation, so tell first Washington Examiner in the current situation On Thursday, the four attorney generals – all Democrats – were “using their positions of power for partisan gain”.

“Only when Republicans began to challenge the Democrats’ long-held advantage in raising money online did these Democratic attorney generals revitalize,” the statement read. “It is disturbing to see these AGs trying to use the power of their offices for the purpose of helping the Democratic Party.”

It seems WinRed was unaware that ActBlue had received a similar message and Request documents. The state attorney general said partisanship had nothing to do with their investigations.

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

Connecticut Attorney General William Tong said: “We initiated this investigation to protect consumers, regardless of party affiliation, from an unfair and misleading marketing practice. WinRed is only one of the entities we are investigating.”

“If WinRed doesn’t mislead or deceive donors in our state, we don’t have to worry about it,” said Raquel Coombs, a spokeswoman for Attorney General Brian Frosh of Maryland.

The use of predefined boxes to automatically register donors in recurring donations has become a hot topic of discussion in political circles in recent months. Following the Times investigation, the Federal Election Commission in May unanimously recommended that Congressصت This practice is prohibited, a rare bipartisan moment for an agency often dominated by partisan rancor.

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

Starting July 1, ActBlue has informed the campaigns and Democratic Committees that it will now require any group on the platform that uses pre-set recurring boxes to explicitly ask donors to donate on a recurring basis.

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