Kars-R-Us.com Raised $45 Million—But Less Than 1% Went to Cancer Screenings
In a major crackdown on misleading fundraising practices, the Federal Trade Commission (FTC), collaborating with 22 state agencies across 19 states, has taken action to dismantle a fraudulent charity operation run by Kars-R-Us.com, Inc. and its leaders, Michael Irwin and Lisa Frank.
As stated in a federal complaint, the organization deceived tens of thousands of Americans by asserting that their vehicle donations would support free and low-cost breast cancer screenings through the United Breast Cancer Foundation (UBCF). Although donors were led to believe they were contributing to “saving lives,” the FTC contends that a mere 0.3%—only $126,815 out of more than $45 million collected from 2017 to 2022—was actually allocated for the promised screenings.
The complaint further alleges that over $34.9 million of the funds raised were diverted into payments for Kars, its operators, and related vendors, while a significant portion of the remaining funds was directed towards lavish executive salaries at UBCF.
“This case should send a strong message to fundraisers that the FTC will take action if they misrepresent the truth and exploit the kindness of generous donors for their own gain,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “We are grateful to our state partners for joining this effort to protect the public from fundraising schemes like this one.”
Over 84,000 Americans contributed their vehicles to Kars, attracted by emotionally compelling advertisements in both English and Spanish that aired on television, radio, and online platforms. These advertisements misleadingly asserted that donations would directly fund breast cancer screenings.
According to a proposed settlement submitted in the U.S. District Court for the Central District of California, Irwin will face a permanent ban from all future fundraising endeavors. There are also additional restrictions imposed on Lisa Frank, the current president and sole owner of Kars, as well as the company itself, which include:
Prohibitions against misleading marketing practices related to fundraising or any product/service.
Obligations to verify all future charitable claims made by Kars or its affiliates.
A monetary judgment of $3.88 million, partially suspended due to the defendants’ financial circumstances. Should it be determined that they misrepresented their financial capability, the entire amount will become immediately payable.
The complaint also claims that Irwin, Frank, and Kars either were aware or should have been aware that the promotional statements made on behalf of UBCF were misleading and lacked substantiation.
The enforcement action was supported by 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, as well as secretaries of state in Maryland, North Carolina, South Carolina, and the Utah Division of Consumer Protection.
