105% of 1st year donations (for a charity) go to the consultancy firm.

Hi all,

My wife got stopped by a person on the street seeking sponsorships for 'Medecins Sans Frontieres'.
All well and good and one of the more 'worthy' causes in our eyes. Anyway, she got signed up to become a 'Field Partner' which is essentially a recurring monthly donation. All sweet, however on later reviewing the little slip of paper that she received there is a section that says the following.

Details of Payment to Trader: Expenses incurred in the collection of your pledge are paid to Cornucopia Consultancy PTY LTD. They receive a one off payment for undertaking this vital fundraising activity. Thee fee will be approximately 105% of the first years pledge, and over the average length of the pledge, estimated at 5 years, this amount is approximately 21% of the total pledge amount.

Now as my wife had signed up for $20 per month donation, this means this consultancy firm is raking in over $250 from our 'donation' if we leave it. Upon some further digging, it appears this company has a very 'interesting' business model, offering free flights to Australia for people overseas to come and work for them for 6 months on a reduced pay/commission model. Seeing that they can rake in $250 from one persons donation, it quickly becomes apparent how they are able to do this. I've told my wife she should call up and cancel the monthly donation, as MSF effectively is getting nothing of it and if she actually wants the charity to get any money, she would be better off donating directly through the MSF website.

The thing that gets me even more frustated is that if someone particularly generous signed up to this and gave say $100 per month, the consultancy firm would receive that entire amount $1260 over the first year. This business model is clearly not in it for the charity!

This brings me to my next concern…
On the form it has the following statements
1. I confirm I am at least 21 years of age.
2. I look forward to supporting Medecin Sans Frontieres Australia with this ongoing pledge for two years or longer
3. I would like to increase my donation by the Consumer Price Index on the 1st of September each year
(All of which have a little spot to sign).
Has she locked herself into some sort of dodgy 'contract' or would she be within her rights to call up and cancel? It does say on the back of the form in the direct debit agreement 'Should you wish to cancel, defer or make alterations to your direct debit please call…. so I am hoping there will be no problems cancelling it.

I am more than happy for her to donate this money to a worthy cause like MSF, but it has frustrated me that such a deceptive collection model is being employed by them. What are your thoughts? What should she do?

Comments

  • +12

    Never, ever donate to people on the street.

  • +2

    You need to realize what you are looking at is not a charity cause but a contract.

    Always read the fine print, before you sign. Chuggers (Charity muggers) can tell you bald-faced lies about the terms and conditions, the minimum monthly donation amount and so on.

    Cornucopia has been around a long, long time. I remember even applying to work as a fundraiser as a student, (failed at the interview though, probably because I wasn't good looking enough or a good sweet-talker?). Chuggers make my skin crawl.

    • So has she 'signed a contract' meaning she is committed for two years or should she be able to get out of it by getting in touch with them?
      (This is why I don't let her go shopping by herself!) lol

      • As long as the contract doesn't contain a clause where she is penalized for breaking said contract, no, there shouldn't be any issues in cancelling the payment plans.

  • I've known this for years, so I always so no thanks before they even get a chance.

  • +1

    How else are the directors able to drive fancy cars and waterfront properties? You want them to live in the burbs and drive a Toyota or Mazda?

    • +1

      If the properties are waterfront, wouldn't a yacht or a jetski be more practical than a fancy car…

      • The office isn't waterfront though so need to drive the Maserati

        • +1

          to drive to the heliport

        • @altomic: isn't the heliport on the top floor?

        • @mbck: it's at one of the spare water front mansions

  • I would say that you have a fair case to ask for cancellation under the Telemarketing and Door to Door Sales section of the ACL. Read on more about it here https://www.accc.gov.au/consumers/sales-delivery/telemarketi… but its very clear that you have 10 Days to inform them of your intention to cancel without any contract penalty being binding.

  • Maybe someone can correct me. But, I was thinking that because donations are not a contract, as you are getting nothing in return, this is not legally enforceable. So you are able to cancel anytime.

  • I agree with lolz112. This is not a contract. A contract requires 'valuable consideration' be exchanged, and your wife is getting nothing in return. I suggest you write to the address on the paperwork and advise them you wish to cancel any arrangement. Also talk to your bank or other provider (however you agreed to pay for the monthly installments) and advise them that you were pressured and misled and you are revoking any authorisation to pay.

  • This is not an enforceable contract by any means.

    There's no intent to create a legal relationship, no "offer" (goods, services, omething promised to you in exchange for your consideration) etc

    Definitely cancel and sign up directly with the charity.

  • Print this thread, scan it and email it to them.

  • So we contacted them via email stating that we wanted to cancel the DD and the reasons for doing so (unreasonable commission setup etc)
    They said it was fine and effective immediately and they also said that they value the feedback. They gave what looked like a long 'standard' answer to the 'commission trail' discussing how it works for them / creates long term income etc… (I still don't agree with it), but regardless my wife will only be donating directly from now on.

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