NASHVILLE, Tenn. -- The state of Tennessee is cracking down on a group that's been collecting used clothing and household items on behalf of a local charity, but not giving those donations directly to the charity.
The company collects donated items on behalf of The ARC of Davidson County and then sells it in the company's own thrift shops.
Now, the company faces more than $200,000 in fines for what the state calls false, misleading and deceptive practices.
This all started after someone who had donated items to The ARC of Davidson County, to help people with intellectual or developmental disabilities, spotted those very same items while shopping at the Southern Thrift store on Charlotte Avenue in West Nashville.
They were shocked and complained to the state that, if they'd known this is where their donations were going, they would never have given them.
It turns out, Southern Thrift is owned by the same group that also runs ARC's donation collection trucks and maintains ARC's collection bins.
Professional solicitor J&I Advisory Support not only makes the telemarketing calls for The ARC, but also has a long-running agreement with the charity to collect clothing and household items from across Middle Tennessee.
It sells those items in its chain of thrift stores, and the ARC then gets a percentage of the sales.
But if you look at the bins and trucks, all you see is the The ARC's name. Nowhere does it indicate that these are actually operated by paid solicitor J&I Advisory and not The ARC itself.
The state says that violates the Tennessee Charitable Solicitations Act.
Now the Charitable Solicitations division is fining J&I $247,500 for wrongly mispresenting itself as The Arc Of Davidson County. Investigators found J&I failed to disclose to consumers that it operated the 15 trucks and 53 bins with the charity's logo.
State regulators also found that J&I's employees failed to tell consumers they were calling on behalf of J&I when making telephone soliciations for The ARC.
The chief manager at J&I Support told NewsChannel 5 Investigates that they do plan to appeal the fine because they say they've been operating the same way for 35 years, that their trucks and bins have always simply said and only said The ARC and it's never been a problem before.
He also said The ARC's website explains that J&I is paid to run its donation collection program.
The ARC says it gets nearly $230,000 a year from the program.
It's important to note that the state says this investigation was focused solely on J&I. It did not find the ARC did anything wrong.