Cooper defends ad use

State Attorney General Roy Cooper has been running public service ads in newspapers and on radio stations across North Carolina — the same practice that became a major issue in the last governor’s race.

The Attorney General’s Office has spent $ 219,486 on public service ads warning homeowners of predatory lending practices by mortgage lenders. The radio and newspaper ads are paid for from the proceeds of court settlements resulting from a lawsuit brought against a mortgage lender.

“It’s my personal responsibility as attorney general to warn consumers about scams and get them their money back if they had been cheated,” Cooper said in an interview Friday. “It’s been clear that this campaign has been successful in doing that because of the dollar figure.”

Cooper said the ad campaign helped net $ 17 million in refunds to consumers.

The issue of public service ads has been debated across the country. There is often a fine line between public information and self-serving political promotion.

Public service ads became a hot issue in the 2000 governor’s race, after then-Attorney General Mike Easley’s office spent — during a five-year period — $ 905,000 on television, radio and newspaper advertising warning of consumer fraud. The money to pay for those ads also came from legal settlements.

Republican gubernatorial candidate Richard Vinroot ran ads during the campaign claiming Easley “misused a million dollars of public money to pay for political ads.”

A conservative group, N.C. Citizens for a Sound Economy, filed a lawsuit challenging the constitutionality of Easley’s use of the money, saying it violated a constitutional provision that all penalties go to the public schools.

The lawsuit was dismissed by a Superior Court judge. State Auditor Ralph Campbell also looked into the expenditures but found no wrongdoing.

“I really wish all the money from settlements would go to our public schools,” said Chuck Fuller, an official with the taxpayers’ group. “But if they are going to do consumer education, at least Roy Cooper did it the right way by targeting specific individuals and not just a general media campaign.”

The Cooper ad campaign resulted from a lawsuit brought by the Attorney General’s Office against The Associates, a mortgage lending firm. The settlement involved a practice that is now illegal called “packing,” in which expensive prepaid credit insurance was added to mortgage loans without the homeowners’ knowledge or understanding.

The Attorney General’s Office in December launched a $ 219,486 campaign to reach consumers who may have been overcharged. As part of the campaign, notices were sent to 14,000 customers of The Associates.

Other money was used for an advertising campaign that ran two weeks in December and two weeks in January to correspond with the mailings. The ads ran in 13 newspapers that cater to African-Americans, and the radio spots were broadcast on 21 stations and the N.C. News Network.

The Attorney General’s Office paid $ 188,218 in direct advertising costs and $ 31,268 to Webb Patterson Consultants, a Durham-based public relations and advertising firm, to prepare the material.

The newspaper ads included a photograph of Cooper and prominently displayed his name.

Normally, proceeds from such settlements go for restitution, attorney’s fees go to the state’s general fund, and penalties go to the schools. The Attorney General’s Office said “99 percent” of the settlement money in the case will go for restitution.

Cooper said he would have no reservations about running more ads.

“If the situation arises where we have had wrongdoers scam consumers, I would make sure we get refunds from the consumers in the most effective way,” he said.

GRAPHIC: photo Ads effectively reached consumers, Cooper says.