The Fundraising Standards Board has upheld complaints against the charity Painted Children for carrying out what it believes were illegal street collections and has reported it to the Metropolitan Police, the Charity Commission and Trading Standards.
The adjudication was made at board level after six people made complaints and two were not resolved by the charity or FRSB staff. It is only the fourth board adjudication by the regulator, and the first time it has upheld a complaint.
The FRSB ruled that the charity, which supports children and young mothers in Nepal, the Maldives and Bangladesh, had been collecting in London without a street licence, in breach of the Police, Factories Etc. (Miscellaneous Provisions) Act 1916.
It also found evidence that the charity was paying street collectors, which is illegal: its advertisement on the website Gumtree promised a "handsome income" alongside a video showing street collectors in London.
Painted Children had implied it did not make collections in public places, the board said; but if this was the case, the existence of the advert meant the charity was in breach of the requirement in the Fundraising Promise to be "honest and open".
Colin Lloyd, the chair of the FRSB, said the charity had knowingly fundraised illegally and "shown reluctance and complacency in its approach to both its fundraising malpractice and possible resolution".
The board has ended its membership and offered it a 12-month monitoring programme. It has also asked Nick Hurd, the minister for civil society, to implement part 3 of the Charities Act 2006 on the grounds that the case shows the need for less complex licensing. Part 3 would require charities to obtain a Public Collections Certificate from the commission.
The FRSB recommended that the Institute of Fundraising should consider redrafting some of its codes of practice and create a new code for cash collections. Louise Richards,
the director of policy and campaigns at the institute, said the complexities of such collections did not lend themselves to a stand-alone code.
Victoria Phillips, the manager of Painted Children, said it would "cooperate fully" with the FRSB: "Practices have changed dramatically since the complaints," she said. "Painted Children regrets hugely the judgement, the mistakes and the practices of the past."