By Patrick Manning
Published March 16, 2011
In 2009, Kerry Sheldon signed up for a membership with the Association of Community Organizations for Reform Now — known more commonly as ACORN — to get mortgage counseling when she started to worry about losing her home to foreclosure.
“It didn’t seem like a bad deal,” says Sheldon. “I was excited somebody was going to help me.”
She says she paid ACORN $10 a month in automatic withdrawals from her credit union checking account for the membership. ACORN started collecting her money, but she never heard from them, so she went directly to her lender to fix the problem with her home mortgage.
She tried several times to cancel the payments but never heard back from any of ACORN’s offices, including the office in Wilmington, where she lives.
She was told at that time by her credit union that the only way for her to cancel the payments is if she closed her bank account. She and her husband didn’t want to do that because they feared their bad credit rating would prevent them from opening another account. So the withdrawals of $10 a month continued for two years, totaling more than $200.
When she heard in November that ACORN filed for Chapter 7 bankruptcy, which disbanded the group, she wondered why the withdrawals continued — and where her money was going.
Joseph W. Shulter, a bankruptcy attorney in San Antonio, tells FoxNews.com that under Chapter 7 bankruptcy, it is illegal for ACORN to continue collecting funds from members.
“Under liquidation they must cancel auto withdrawals,” he says. “Had they filed to re-organize, they would be able to.” But ACORN was calling it quits altogether.
Michael McCray, spokesperson for ACORN 8, a watch group made up of former ACORN board members, says they have had many ACORN members come to them saying they have not been able to cancel their memberships.
“We received dozens of complaints from around the country,” McCray said. “It’s still happening today.”
FoxNews.com contacted ACORN’s bankruptcy attorney, Arthur Z. Schwartz. He says there’s no way former ACORN members are still paying dues. “It can’t be true,” he says. “It’s impossible because we don’t have a bank account.”
Schwartz says on April 1, 2010, ACORN leaders sent out a letter to all members that they were shutting down operations. “Anyone who wanted to cut off their withdrawals, they could.” He says instructions on how to cancel the membership were in the letter.
ACORN hasn’t had any active accounts withdrawing funds since August 2010. As for Sheldon’s case, he said it’s possible Sheldon mistakenly signed her account over to a new organization. He says it was common for ACORN offices to give lists of members to other programs.
Matthew Vadum, a senior editor with the Capital Research Center, a program that researches non-profit organizations, said historically ACORN has made it difficult for people to quit their memberships.
“People decide they don’t want to be members anymore, but the membership deductions kept going,” he told FoxNews.com.
“The question is if they did it intentionally or if it was an honest mistake,” he added.
Sheldon said that she made contact with the former ACORN employee who set up her membership and has been assured that the withdrawals would be discontinued. She’s now waiting to see whether any withdrawals shows up on her next bank statement.
Former ACORN representatives contacted by FoxNews.com refused to comment.