The Federal Trade Commission (FTC), in partnership with 22 agencies from 19 states, has halted a charity fundraising operation accused of misleading donors. According to a complaint filed by the FTC and state partners, Kars-R-Us.com, Inc. (Kars) and its operators, Michael Irwin and Lisa Frank, raised over $45 million on behalf of the United Breast Cancer Foundation, Inc. (UBCF), but only a small portion of those funds was used for breast cancer screenings.
The complaint alleges that Kars solicited vehicle donations nationwide through various media channels, claiming that contributions would help UBCF “save lives” by providing free and low-cost breast cancer screenings. However, just $126,815—amounting to 0.28% of the total raised—was reportedly spent on these services.
“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.”
Between 2017 and 2022, more than 84,000 people donated vehicles to Kars after being influenced by its advertising campaigns in English and Spanish. The majority of funds collected were used to pay Kars, its operators, vendors, or went toward compensation for UBCF’s CEO rather than directly supporting breast cancer-related services.
The proposed settlement order places several restrictions on those involved:
- Michael Irwin is permanently banned from any fundraising activities or providing related services.
- Lisa Frank is prohibited from making misrepresentations associated with fundraising or in marketing any product or service.
- Kars and its employees are barred from making misrepresentations related to fundraising or marketing.
- Both Kars and Frank must substantiate any future fundraising claims.
A monetary judgment totaling $3,882,091 has been imposed on Irwin, Frank, and Kars; however, this amount is partially suspended due to their inability to pay in full. If it is determined that they have provided false information about their financial status to authorities, the entire judgment will become immediately due.
State agencies joining this enforcement action include 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; secretaries of state from Maryland and North Carolina; South Carolina’s secretary of state; as well as Utah’s Division of Consumer Protection.
The Commission approved filing the complaint and stipulated final orders unanimously (3-0). The legal proceedings are taking place in the U.S. District Court for the Central District of California.
Consumers seeking guidance on safe charitable giving can access resources at consumer.ftc.gov or report suspected fraud at ReportFraud.ftc.gov.
