New York – A company operating more than 1,100 clothing drop-off bins in New York has agreed to pay $700,000 to settle claims that it falsely advertised its operation as charitable while selling donated items for big profits, prosecutors said on last week Thursday.
Thrift Land USA of Yonkers Inc is the latest for-profit company to come under scrutiny for operating the large metal donation bins, which have proliferated in New York in recent years.
“Duping members of the public into thinking that they are making a charitable donation, when in fact they are enriching a for-profit corporation, is both deceptive and illegal,” said Attorney General Eric Schneiderman.
An attorney for Thrift Land did not have any comment on the settlement.
Thrift Land generated at least $5.6 million in revenue in 2013 and $4.4 million in 2012 by selling donated clothing to companies which would then resell the apparel to buyers in Mexico, Jordan and other countries, according to the settlement.
Two charities named on Thrift Land bins received a monthly fee of about $1,000 for the use of their names and logos, the settlement said.
It was not clear if all of the clothing Thrift Land sold between 2012 and 2013 came from the donation bins, which were painted bright colors and decorated to look like miniature houses.
Under the settlement, Thrift Land will be required to pay $650,000 to two not-for-profit organizations – the New York Community Trust and the Westchester Community Foundation – “so that the charitable intent of the people who placed clothing in its bins will be fulfilled,” prosecutors said.
It will also be required to rebrand its bins so they do not imply that donations made to the bins will serve any charitable purpose and clearly state that it is a for-profit business.
Residents and policy-makers have seen donation bins as an increasing problem in New York City, where the number of bins tagged for removal by city officials jumped to 2,006 in 2014 from 91 in 2010, according to a New York Times report last year.
After the release of the report, New York’s City Council voted to raise fines for bin operations in violation of city code.