Vehicle donation Scheme Deceptively Diverted Millions from Breast Cancer Charity
A recent proposed settlement with the Federal Trade Commission (FTC) and numerous state partners targets Kars-R-Us.com, Inc. and its operators for allegedly misleading donors regarding the use of vehicle donations intended for breast cancer support.The FTC alleges that Kars and its leaders exploited donor generosity for personal and buisness gain, rather than directly funding breast cancer screenings as advertised.
Between 2017 and 2022, Kars raised over $45.5 million on behalf of the United Breast Cancer Foundation (UBCF). However, the complaint details that approximately $34.9 million of these funds were directed to Kars, its operators, and vendors. Of the remaining funds reaching UBCF, a important portion was reportedly used for purposes other than direct program services, including ample compensation for the charity’s CEO.
Kars solicited donations through television, radio, and online advertisements in both English and Spanish, promising donors that their vehicles would “save lives” by funding free or low-cost breast cancer screenings. The FTC alleges these claims were deceptive and lacked factual support, designed to maximize contributions through emotional appeals. Over 84,000 individuals donated vehicles based on these representations.
The proposed settlement imposes significant restrictions. Irwin, Kars’s President and co-owner until 2022, is permanently banned from all fundraising activities and prohibited from making misrepresentations in connection with the marketing or sale of any product or service. Frank, the current president and sole owner of Kars, is similarly prohibited from making misrepresentations related to fundraising or other product/service marketing. These restrictions also extend to Kars itself and its employees, preventing deceptive claims in fundraising or marketing. Furthermore, Kars and Frank are now required to substantiate any future fundraising claims.
A total monetary judgment of $3,882,091 has been levied against Irwin, Frank, and Kars, though a portion is suspended due to financial constraints. The full amount becomes immediately payable if any of the parties are found to have misrepresented their financial situation to the FTC or state partners.
The action was a collaborative effort, involving attorneys general from Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Maryland, new York, North carolina, Oklahoma, Oregon, Utah, Virginia, West Virginia, and Wisconsin. Additionally, secretaries of state from Maryland, North Carolina, and South Carolina, and the utah Division of Consumer Protection participated in the case.
The FTC offers resources for consumers seeking data on safe donation practices and avoiding charity scams, available on their website: https://consumer.ftc.gov/features/donating-safely-and-avoiding-scams.
