Charity fundraisers face collapse after backlash against cold calls

COLD CALLING charity fundraisers accused of targeting vulnerable people for donations are being forced out of business by tougher rules and an increasingly hostile public.

One of the largest telephone fundraisers in the country went bust last week amid a collapse in profits.

Pell & Bales, which was accused of bombarding elderly people with phone calls and disguising the fact its fundraisers were paid employees rather than volunteers, is to go into liquidation with the loss of 20 full-time jobs. It blamed “the challenging marketplace” for its collapse, saying: “Following a period of intense media scrutiny and government measures to regulate the activities of telephone donation agencies, the management team of Pell & Bales have been forced by creditors to place the company into liquidation.”

It is the latest in a growing number of fundraising agencies to go to the wall. Around 10 telephone fundraisers have gone into liquidation in the past year, including GoGen, whose clients included the British Red Cross, Macmillan Cancer Support and the NSPCC.

This follows increasing complaints about the tactics used by the agencies, with claims that vulnerable elderly people have been persuaded to sign over large sums of money after being pestered with repeated phone calls.

But it has also raised questions over the ability of charities to raise funds for vital projects to help the needy.

In July 2015, the Information Commissioner banned fundraising organisations from calling existing charity supporters who were registered with the Telephone Preference Service, used by households to stop unsolicited sales and marketing calls.

Another firm forced to close in April, Personal Telephone Fundraising, said it lost 75 per cent of its business overnight as a result of the ruling. Pell & Bales was the third-largest player in the charity fundraising sector in terms of revenue. However, in 2014 an investigation by Channel 4’s found that recruits at Pell & Bales, which was raising funds for Great Ormond Street Hospital Children’s Charity (GOSHCC), Oxfam, Unicef and Barnardo’s, were told that they should pretend they had “children to feed” if potential donors asked why they were not unpaid volunteers.

It was also reported that staff were given scripts in which potential donors were only to be told that they were paid after donors had decided to donate.

The programme spoke to an 82-yearold woman who hid her telephone to avoid the six calls a day she received from fundraisers and a daughter who said her late father, who suffered from Alzheimer’s, set up direct debits to several charities after being targeted.

An undercover reporter was also expected to meet targets, despite GOSHCC’s website stating “our fundraisers are not given personal financial targets”. A Pell & Bales spokesman said at the time that its employee scripts were written “in line with legal requirements and best practice guidelines”.

Pell & Bales’s collapse comes just two months after it was sold by its parent company Parseq to a group of investors led by the financier Gerry Hoare. Mr Hoare told magazine that his investment in Pell & Bales had proved to be a “very big mistake”.

The firm’s profits fell by almost 80 per cent to £267,000 in 2014, and its turnover fell by more than 30 per cent to £7 million, according to its latest accounts.

Pell & Bales’s fundraisers and operations staff last week received telephone calls from one of the company’s investors, saying they would not be paid for the month of August. They were told to make a claim to the insolvency firm Moorfields Corporate Recovery, which would handle the liquidation process.