California Attorney General Rob Bonta Announces Settlement with Kars for Deceptive Cancer Charity Fundraising Scheme

Kars and its operators raised millions but only a fraction of donations went to fund breast cancer screenings

OAKLAND -California Attorney General Rob Bonta, along with the Federal Trade Commission (FTC) and 19 states and agencies, announced a settlement with Kars-R-Us.com, Inc. (Kars) and its operators, Michael Irwin and Lisa Frank, for their deceptive charity fundraising scheme. Between 2017 and 2022, Kars raised more than $45.5 million, including approximately $16.7 million from California donors, through vehicle donations on behalf of the United Breast Cancer Foundation, Inc. The solicitation scheme claimed that funds raised from vehicle donations would "save lives" by providing free and low-cost breast cancer screenings, but $34.9 million of the $45.5 million raised went to Kars, its operators and vendors and not towards breast cancer screenings. Under the stipulated judgment, Kars, Irwin, and Frank face restrictions on future fundraising activities, and Irwin will be permanently banned from fundraising.

"Instead of using the funds to help those in need of breast cancer screenings, Kars engaged in a deceptive cancer charity fundraising scheme - a scheme that deliberately misled the public, exploited compassion, and diverted charitable donations to enrich themselves," said Attorney General Bonta. "At the California Department of Justice, we will continue to hold bad actors accountable for their unlawful behavior, protect donors, and support honest charitable work. I want to thank the FTC and states nationwide for their partnership in making this critical settlement possible."

Kars and its operators solicited vehicle donations through national and local TV, radio, and online ads in English and Spanish. The Spanish ads were specifically placed in Spanish-speaking concentrated markets in Arizona, California, Florida, New Mexico, and Texas. More than 84,000 well-intentioned people donated their vehicles to Kars, but only $126,815 or 0.28% of the more than $45.5 million that Kars raised was used to provide breast cancer screenings.

The proposed settlement order imposes restrictions on Kars, Irwin, and Frank, including:

• Permanently banning Irwin from fundraising or providing fundraising services to any person, directly or indirectly. He is also prohibited from making misrepresentations in connection with the marketing or sale of any product and service;
• Prohibiting Frank, Kars's current president and sole owner, from making misrepresentations associated with fundraising, or in the marketing or sale of any other product or service;
• Prohibiting Kars, its employees, and anyone actively working for or engaged with the company from making misrepresentations associated with fundraising, or in the marketing or sale of any other product or service; and
• Requiring Kars and Frank to substantiate fundraising or marketing claims.

Irwin, Frank, and Kars also face a total monetary judgment of $3,882,091, which is partially suspended based on their inability to pay the full amount. If Kars, Frank, and Irwin are found to have lied to the FTC and state partners about their financial status, the full judgment will be immediately payable.

Attorney General Bonta joins the FTC and the attorneys general of Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Maryland, New York, North Carolina, Oklahoma, Oregon, Utah, Virginia, West Virginia, and Wisconsin as well as the secretaries of state of Maryland, North Carolina, and South Carolina, and the Utah Division of Consumer Protection in filing this judgment.

A copy of the complaint and stipulated judgment can be found here and here.