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Consumer & Business Advice
Media releases
3 August 2014

The State’s consumer watchdog, Consumer and Business Services, is currently undertaking an investigation into a snack box operator where hundreds of thousands of dollars appears to have been collected under false pretences.

CBS has obtained information that an individual had snack boxes placed in workplaces across Adelaide and regional areas, claiming to raise money for a particular charity which is not currently receiving any of the funds.

In this case, CBS is aware that the company has hundreds of snack boxes in workplaces and has collected substantial amounts of money. Many of the boxes are still to be accounted for.

CBS obtained a warrant under the Collection for Charitable Purposes Act which enabled Investigators to conduct a raid upon the residence of the company director to seize documents, including financial records and the lists of workplaces affected.

Preliminary examination of the accounts indicate that over the past five years, the company has collected over $2 million from the boxes.

The charity named on the boxes has informed CBS that several years ago, they had an agreement for the company to use their name on the boxes. In exchange the company agreed to give the charity a small percentage of the proceeds.

However the charity has told CBS that the company is no longer authorised to raise money in their name, and that no funds have been provided to the charity over the past couple of years.

CBS is still examining the financial records of the company, but so far, it appears many hundreds of thousands of dollars has been collected in that time with nothing being passed on to the charity.

Our investigation indicates this was not a small operation - the company had at least four employees, and operated several vehicles.

Our investigators have also been told that the operator of the company was offering “franchises” of his operation for sale.

CBS officers are currently contacting workplaces to advise them of the investigation, which is continuing.

“The investigation is in the preliminary stages and the extent of any offending is yet to be determined, however it is a timely reminder for people to check the bona fides of any charity collector.”  Commissioner Dini Soulio said.

The alleged conduct may be a breach of Section 6 Collection for Charitable Purposes Act– a person must not act as collector unless the person holds, or is authorised by the holder of, a section 6 licence.

Many workplaces have snack boxes in their workplaces that work on an honesty system. Chocolates and confectionary are regular items and the boxes are deposited in workplaces seeking workers to buy items from the box of goods eg a chocolate bar for 80c. The box indicates that the money is going to a named charity.
 
Workers are led to believe that the proceeds are being passed to the named charity and are therefore more likely pay a bit extra because of the association with a charitable purpose, eg:
$1 or $2 placed in box each time. These donations can clearly add up to significant amounts.

Companies collecting on behalf of a charity need to have a current authorisation from the charity. The charity needs to be licensed in SA with CBS.

Often snack boxes are supplied to workplace sites without any written consent being provided by the workplace management. Managers should request a copy of the charity’s authorisation from the distributor.

The charity whose name has been falsely used is working with CBS, and has asked not to be named.

“These sales are often used as a legitimate fund-raising method for charities. CBS does not want to deter people from giving to charity, but want to help ensure people’s charity dollar is going where they think. If money isn’t going where people think it is, people are being mislead and it harms the charities.” Mr Soulio said

If a workplace is concerned about the legitimacy of a charity box, it should contact the named charity to ensure that it has authorised the distributor to collect on its behalf. If no authorisation has been provided, please contact CBS on 131 882.