CHARLESTON, W.Va. (WVDN) — Today, West Virginia Attorney General JB McCuskey, along with the Federal Trade Commission, 21 agencies from 18 other states, stopped a deceptive charity fundraising scheme and its operators who made false or deceptive claims to 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 FTC and states (link to 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.
Under a proposed settlement order reached with the FTC and its state partners (link to order), Kars and its operators face restrictions on future fundraising activities and Irwin, Kars’s President and co-owner until 2022, will be permanently banned from fundraising.
“Cancer research and prevention is a cause that is personal to me, and so many other West Virginians. To take advantage of people’s good nature and willingness to help those battling this horrible disease is lower than low. I am thankful for the work of this coalition of states, agencies and the FTC, to stop this fundraising scheme once and for all,” Attorney General McCuskey said.
“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 to 2022 Kars raised more than $45.5 million on behalf of UBCF. The complaint alleges that $34.9 million of the 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.
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 or 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 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.
Consumers looking for more information about how to donate safely and avoid charity scams can find it on the FTC’s website.
