Illinois’ leading consumer group has fired many of its workers and was taken over by a national consumer organization in the last few weeks, raising new questions about whether unhappy customers and unpaid ex-employees of the Illinois entity will get their money.
Citizen Action of Illinois is now a chapter of Washington-based Citizen Action, Ed Rothschild, spokesman for the national organization, said Thursday. The Illinois group had been an independent affiliate of the Washington organization, which it helped found in 1979.
In the past month, the Illinois group has been rocked by financial problems and by news of a federal investigation relating to its banking practices. Its longtime executive director, Robert Creamer, resigned on June 6, after reports that federal authorities were investigating whether a $1 million bank overdraft was related to allegations of a check-kiting scheme.
Creamer has previously been unavailable for comment.
About the time Creamer resigned, the group fired many of its approximately 125 employees and turned over its telemarketing operation to lenders, sources said.
Several workers said in interviews that they weren’t paid for their last three weeks of service, and some say previous paychecks bounced.
“This has created a lot of problems,” said Joe Costigan, spokesman for the Union of Needle Trades, Industrial and Textile Employees, which represented about 90 workers. “We are negotiating to see that everybody is paid what they are owed.”
In addition, about 60 complaints relating to the group’s telephone sales of a credit-card protection plan are still pending at the Better Business Bureau of Chicago and Northern Illinois, according to the bureau’s operations director, Steven Bernas. The bureau has fielded a total of 233 complaints about the group in the last three years, most of which were settled.
It’s unclear how Citizen Action’s departure from the telemarketing field will affect aggrieved customers, who generally claim they didn’t receive requested refunds.
Also on Thursday, Illinois Insurance Director Mark Boozell issued a subpoena for the credit-card protection plan’s books and records to determine if the plan represents an unauthorized insurance sale. Under the seven-year plan, customers pay $99 to avoid the hassle of reporting lost or stolen credit cards and the maximum $50 liability imposed by card issuers for unauthorized charges.
Agency spokeswoman Nan Nases said the department issued the subpoena before it learned that the Illinois group had turned over the business to its lenders.
John Cameron, former associate director of Citizen Action of Illinois, declined to comment on the group’s current status.
“We are in the process of transition and will discuss it in a few weeks,” he said.
Cameron said he is overseeing the transition as an employee of the national group. He and other remaining Illinois staffers have moved out of the organization’s previous offices and now share space with two other non-profit groups in Chicago.
Washington-based Citizen Action has 30 state affiliates, about half of which are independent and the rest are chapters, whose policies and finances are controlled by the national group.
The national organization has recently had its own troubles, including the departure of two of its biggest state groups: Indiana and Ohio. It also has been implicated in a funding scandal involving last year’s re-election of Teamsters Union President Ron Carey.
Cameron declined to say how many former employees of the Illinois group weren’t paid, but he said some of the problems were caused by frozen bank accounts. Cameron referred questions to officials of the group’s fundraising arm. The head of that group, Chicago developer Paul Stepan, did not return phone calls.
Cameron said many of the 60 complaints still pending at the Better Business Bureau have been resolved. He said any new complaints relate to allegedly improper phone solicitations, not overdue refunds.
But that’s not the case for Diane Anderson of Lake Shore, Minn. Anderson, who works for a radio station, said she still hasn’t gotten her money back, even though she promptly returned the packet she received in the mail from the Illinois group late last year.
After 10 calls to the organization brought no results, she finally complained to the bureau earlier this month. “They have really turned me against buying anything again on the phone,” Anderson said.
