WI DOJ, FTC and Coalition Act to Stop Allegedly Deceptive Cancer Charity Fundraising Scheme

MADISON, Wis. – The Wisconsin Department of Justice (WI DOJ), the Federal Trade Commission, and a coalition of 18 additional states took action to stop a charity fundraising operation alleged to have made false or deceptive claims to U.S. donors.

Kars-R-Us.com, Inc. (Kars) and its operators, Michael Irwin and Lisa Frank, solicited charitable donations nationwide on behalf of United Breast Cancer Foundation, Inc. (UBCF), a charity that claims to assist individuals affected by breast cancer, according to a complaint filed by the coalition and the FTC. As alleged in the complaint, Kars claimed that vehicle donations would allow UBCF to “save lives” by providing free and low-cost breast cancer screenings. But, in reality, only $126,815 or 0.28% of the more than $45 million that Kars raised was used to provide breast cancer screenings, the complaint alleges.

“Scams are bad enough. But exploiting people who are intending to help a charitable cause is particularly galling,” said Attorney General Josh Kaul.

Under a proposed settlement order, Kars and its operators face restrictions on future fundraising activities and Irwin, Kars’s President and co-owner until 2022, would be permanently banned from fundraising.

The complaint alleges that Kars solicited vehicle donations through national and local TV, radio and online ads in English and Spanish, claiming the donations would allow UBCF to “save lives” by providing free and low-cost breast cancer screenings. More than 84,000 people donated their vehicles to Kars.

The complaint alleges that between 2017 to 2022 Kars raised more than $45.5 million on behalf of UBCF, and that $34.9 million of those raised funds went to pay Kars, its operators, and its vendors. Of the tiny fraction of funds left to UBCF, most were largely used for other purposes, including generous compensation to UBCF’s CEO, as alleged in the complaint

Kars, Irwin, and Frank knew or should have known that the breast cancer-related claims they drafted and made on behalf of UBCF were deceptive or lacked substantiation, the complaint alleges.

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. That judgment is partially suspended based on their inability to pay, and they are ordered to pay $600,000 of the total amount. However, if Kars, Frank, and Irwin are found to have lied to the FTC and state partners about their financial status, the full judgment would be immediately payable.

Joining WI DOJ and the FTC in this case are the attorneys general of Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Maryland, New York, North Carolina, Oklahoma, Oregon, Utah, Virginia, and West Virginia, as well as the secretaries of state of Maryland, North Carolina, and South Carolina; and the Utah Division of Consumer Protection.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.