Donors thought they were helping veterans, childrens hospitals, and other humanitarian programs

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The FTC and multiple states have secured a settlement with Kars-R-Us.com, Inc. over alleged deceptive charity fundraising practices.
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The company and its operators allegedly misled donors into believing contributions would benefit veterans, children, and other charitable causes.
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The settlement imposes strict compliance measures, financial penalties, and bans from future fundraising activities.
The Federal Trade Commission (FTC), in partnership with several state attorneys general, has announced a sweeping settlement with Kars-R-Us.com, Inc. (Kars) and its operators, after uncovering alleged charity fundraising fraud that misled thousands of donors nationwide.
According to federal and state officials, Kars falsely represented itself as a legitimate fundraising entity working on behalf of well-known charitable organizations. The complaint alleged that donors were led to believe that their contributions often in the form of used cars or monetary gifts would directly support veterans, childrens hospitals, and other humanitarian programs.
Instead, investigators allege, the majority of proceeds were diverted to the companys operators and overhead costs, with little to no benefit provided to the causes donors intended to support.
Kars-R-Us ran a shameful scam to enrich its operators by preying on the generosity of donors who believed they were saving lives through breast cancer screenings, said Connecticut Attorney General William Tong. In coordination with our state and federal law enforcement partners, we will not tolerate deceit and misuse of charitable funds.
Terms of the settlement
Under the terms of the agreement, Kars and its principals are:
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Prohibited from engaging in future fundraising activities for charities or non-profit organizations.
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Required to pay financial penalties and restitution, which will be distributed to legitimate charities and affected donors where possible.
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Subject to strict compliance monitoring, ensuring they cannot re-enter the nonprofit fundraising sector under different names or entities.
The settlement does not constitute an admission of wrongdoing but resolves years of litigation and investigations into Kars activities.
Here are some detailed, practical ways consumers can protect themselves from charity fundraising pitches that might not be what they seem:
1. Verify the charitys legitimacy
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Check registration: In the U.S., most states require charities and fundraisers to register with the state attorney general or a charity regulator. You can search state databases to confirm.
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Use trusted sites: Tools like Charity Navigator, Candid/GuideStar, and the Better Business Bureaus Wise Giving Alliance can help you verify financial transparency and accountability.
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Confirm tax-exempt status: Use the IRS Tax Exempt Organization Search to ensure the charity is officially recognized.
2. Watch for red flags
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High-pressure tactics: Scammers often push for immediate donations, saying time is running out or act now. Legitimate charities dont pressure you.
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Vague claims: Be cautious if the fundraiser cant explain exactly how donations will be used or gives evasive answers.
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Look-alike names: Fraudulent groups often use names resembling well-known charities (e.g., Childrens Wish Network vs. Make-A-Wish Foundation).
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Unclear financials: If most donations appear to go toward administrative costs or marketing rather than direct aid, its a warning sign.
3. Control how you give
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Avoid cash or gift cards: These are hard to trace and often requested by scammers. Stick to credit cards or checks payable directly to the charity, not the fundraiser.
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Dont click on suspicious links: If you receive an email, text, or social media post, go directly to the charitys official website instead of donating through the link provided.
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Ask questions: If contacted by a telemarketer, ask how much of your donation goes to the actual cause. By law, legitimate fundraisers must disclose this.
4. Keep records and monitor
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Save receipts and confirmations: This helps for tax purposes and in case you need to dispute a fraudulent charge.
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Monitor bank/credit card statements: Look for unauthorized or recurring charges.
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Opt out of lists: Ask charities not to share or sell your information to reduce unsolicited fundraising calls.
5. Report suspected fraud
If you believe youve encountered a fraudulent fundraiser:
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Report to the FTC at reportfraud.ftc.gov.
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Contact your state attorney generals office.
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File a complaint with the BBB Wise Giving Alliance.
Always pause and research before giving. A few minutes of checking can ensure your donation goes where its truly needed.
Posted: 2025-09-30 14:58:48