In a significant crackdown on fraudulent charitable operations, the Federal Trade Commission (FTC) has taken decisive action alongside the Oregon Department of Justice and 18 other states to halt a deceptive cancer charity fundraising scheme. The FTC and its state partners alleged that the organization Kars-R-Us.com, Inc. (Kars), and its operators, Michael Irwin and Lisa Frank, ran a nationwide operation falsely promising donors that their vehicle donations would fund breast cancer screenings through the United Breast Cancer Foundation, Inc. (UBCF). Instead of fulfilling this promise, a mere 0.28 percent of over $45 million raised was used for the screening services, as reported by the Oregon Department of Justice.
"Most Oregonians give from the heart, and it’s shameful that scammers exploited that generosity under the guise of helping people with breast cancer," remarked Oregon Attorney General Dan Rayfield in a statement obtained by the Oregon Department of Justice. Kars's supposed charitable activities were advertised through various media outlets, convincing more than 84,000 donors to contribute their vehicles, yet the substantial majority of the proceeds did not reach the intended cause.
Following the investigation, a proposed settlement order has placed severe restrictions on future fundraising activities for Kars and its operators. Irwin, the former President of Kars, will be permanently banned from fundraising. In response to the egregious misuse of funds, Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, stated, “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.” The FTC and its partners worked diligently to ensure that enforcement is stringent on such deceptive operations, as stated by the Oregon Department of Justice.
The settlement also demands substantial financial accountability from the accused parties. Kars and its principal figures, Irwin and Frank, face a collective monetary judgment of $3.88 million. However, this amount is partially suspended due to their reported inability to pay in full. Should it emerge that they have misrepresented their financial standing to the FTC and state partners, they would be required to pay the entire judgment. This is according to the information provided by the Oregon Department of Justice.
The 18 other states that joined the FTC and Oregon in this legal action include a broad coalition from across the country, showcasing a united front against charity fraud. The attorneys general of the participating states, along with various secretaries of state and consumer protection divisions, reflect the wide-ranging support for protecting the public and ensuring that charitable donations reach the causes for which they are intended, as per the Oregon Department of Justice.
