In the BBC Scotland documentary The Great Military Charity Scandal, which was broadcast last night, anti-Islamic and Nazi merchandise was found on sale in the charity’s shop in Blackpool and on the charity’s website.
The anti-Islamic merchandise allegedly included references to Muslim religious practice, such as the prohibition of pork and alcohol, and to Islamic extremist groups.
The charity is signed up to the Code of Fundraising Practice and sale of the items could be a breach of its rules.
A statement from the charity said that the items referenced in the documentary had been removed from sale and were no longer available on its website. It said that a dyslexic trustee had made mistakes when ordering stock.
The statement said: "We apologise for any upset this may have caused and please rest assured that corrective action has been taken in order to resolve these issues."
In a statement, the Charity Commission said: "The inquiry was opened today in response to regulatory concerns identified from publicised footage of the BBC documentary The Great Military Charity Scandal, in which the charity featured, and items shown to the commission by the BBC that were obtained as part of its investigation.
"The trustees of the charity have been notified and the commission will issue a public statement about the inquiry in due course."
Stephen Dunmore, the chief executive of the Fundraising Regulator, said in the documentary that the merchandise was "not respectful and ethical fundraising".
Our Local Heroes
The commission also announced today it had opened a statutory inquiry into the veterans charity Our Local Heroes, amid claims that the charity’s founder was receiving significant personal benefit from it.
A statement from the commission said it was investigating the charity after it received information in June about a proposed disposal of land owned by the charity, which raised concerns that the land "had been undervalued and could potentially be sold to a connected party".
The regulator said it had received a further complaint, also in June, raising concerns that the charity’s founder, whom the regulator did not name, was receiving significant personal benefit through the charity. It was also alleged that the charity was receiving only 20 per cent of the funds raised through a fundraising company.
The regulator had already criticised the charity in March in a regulatory case report for its deal with the fundraising agency Targeted Management Limited, but decided against opening a statutory inquiry at that point.
Nobody from the charity answered calls made by Third Sector on Wednesday morning.