The Federal Trade Commission and 22 agencies from 19 states have halted a deceptive charity fundraising operation that exploited donors' goodwill while diverting nearly all collected funds away from promised breast cancer services. The enforcement action targets Kars-R-Us.com, Inc. and its operators Michael Irwin and Lisa Frank, who solicited vehicle donations nationwide under false pretenses.
According to the complaint filed by the FTC and state partners, Kars-R-Us operated a sophisticated fundraising scheme on behalf of United Breast Cancer Foundation, Inc., a charity that claims to assist individuals affected by breast cancer. The company used national and local television, radio, and online advertisements in both English and Spanish to solicit vehicle donations from well-intentioned Americans.
The central deception involved promises that donated vehicles would enable UBCF to "save lives" by providing free and low-cost breast cancer screenings to those in need. Kars-R-Us deliberately crafted emotionally manipulative appeals designed to maximize donations, according to federal regulators. More than 84,000 people responded to these appeals by donating their vehicles between 2017 and 2022.
The financial reality behind the operation reveals the extent of the alleged fraud. Despite raising more than $45.5 million over five years, only $126,815 was actually used to provide the promised breast cancer screenings. This represents a mere 0.28% of total funds raised, meaning that 99.72% of donor contributions were diverted to other purposes.
The complaint alleges that $34.9 million of the raised funds went directly to pay Kars-R-Us, its operators, and associated vendors. Of the remaining fraction that reached UBCF, most was used for purposes other than medical screenings, including what regulators describe as "generous compensation" to UBCF's chief executive officer.
"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."
The enforcement action represents a coordinated response to charity fraud that crosses state lines. The multi-jurisdictional approach demonstrates how federal and state regulators are working together to combat deceptive fundraising practices that harm both donors and legitimate charitable causes.
Under the proposed settlement order negotiated with the FTC and state partners, Kars-R-Us and its operators face significant restrictions on future fundraising activities. Most notably, Michael Irwin, who served as the company's president and co-owner until 2022, will be permanently banned from all fundraising activities. Lisa Frank also faces restrictions under the settlement terms.
The complaint alleges that Kars-R-Us operators knew or should have known that their breast cancer-related claims were deceptive or lacked proper substantiation. This knowledge requirement is crucial for establishing the legal basis for the enforcement action and potential penalties.
The case highlights broader concerns about charity accountability and donor protection in an era when Americans contribute billions of dollars annually to charitable causes. Vehicle donation programs, in particular, have faced scrutiny from regulators who note that such programs often benefit fundraising companies more than the intended charitable recipients.
For consumers, the enforcement action serves as a reminder to research charitable organizations before donating. Legitimate charities typically provide detailed financial information showing how donated funds are used, including the percentage that goes directly to program services versus administrative costs and fundraising expenses.
The proposed settlement must still receive final approval from the court overseeing the case. If approved, it will serve as a binding legal agreement that restricts the defendants' future activities and provides a framework for monitoring compliance.
This enforcement action reflects the FTC's continued focus on protecting consumers from deceptive practices in the charitable sector. The agency has previously taken action against other fundraising schemes that misrepresent how donations will be used or exaggerate the charitable impact of contributions.
The case also demonstrates how state and federal regulators can work together effectively to address fraud that spans multiple jurisdictions. The coordinated approach allows for more comprehensive enforcement and helps ensure that bad actors cannot simply move their operations to avoid regulatory scrutiny.
For the thousands of donors who contributed vehicles believing they were supporting breast cancer screening programs, the settlement provides validation that their concerns about potential fraud were justified and that regulators are willing to take action to protect charitable giving.