Kars4Kids Lawsuit Accuses Charity of Using Deceptive Ads to Solicit Donations for ‘Misrepresented Purposes’

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Kars4Kids faces a proposed class action lawsuit that alleges the charity has deceived unwitting consumers into donating their vehicles for “undisclosed and misrepresented purposes,” namely to fund a separate entity that promotes orthodox Jewish ideology in New York and New Jersey.

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The 45-page RICO lawsuit alleges that although Kars4Kids represents in ubiquitous television and radio advertisements that vehicle donations help local children in need regardless of any racial, ethnic or religious affiliation, cars donated to the charity are used to fund New Jersey-based co-defendant Oorah Inc., an organization whose stated mission is to develop orthodox Jewish children and families.

The case also claims Kars4Kids, unbeknownst to donors, uses “the vast majority” of donation proceeds to fund its own and Oorah’s “significant” expenses and investments.

The filing contends that Kars4Kids, despite multiple government investigations and private lawsuits over the “misleading nature” of its solicitation advertisements, has continued to broadcast misleading ads nationwide, while donors are not properly informed that their donations are used “almost exclusively to fund its orthodox ‘outreach’ activities directed solely at Jewish families.”

“The reason is clear: Kars4Kids would receive significantly less donations, and Oorah significantly less funding for its orthodox ‘outreach’ activities, if donors knew the truth about Defendants’ scheme,” the proposed class action alleges.

Per the class action lawsuit, Kars4Kids was initially created by Oorah as its fundraising arm in the mid-1990s but was purportedly spun off from the organization in 2000. Nevertheless, the suit says, Kars4Kids and Oorah have effectively continued to operate as the same enterprise, sharing headquarters and office space in Lakewood, New Jersey and overlapping staff and executives. The lawsuit alleges that nearly 100 percent of vehicle donation proceeds received by Kars4Kids are “simply funneled to Oorah,” which uses most of the money to cover its own operations, expenses and investments. A small portion of the funds are used to run programs that “seek to convert New York and New Jersey Jewish children and their families to orthodox ideologies,” the case says.

According to the complaint, Kars4Kids settled two separate lawsuits with the Pennsylvania and Oregon state attorneys general in 2009 after being “justifiably accused” of broadcasting misleading ads and failing to properly inform donors about the destination of their donations. As part of those settlements, the suit says, Kars4Kids and Oorah were required to include additional disclosures in their ads and solicitations in those states to inform potential donors about the purpose and use of their donations.

In 2017, the Minnesota attorney general investigated the defendants and similarly found that more than 90 percent of Kars4Kids’ charitable expenditures were “simply transferred to Oorah” to “promote Orthodox Judaism, primarily to New Jersey and New York children,” the lawsuit relays. Four years later, the case says, a California donor sued the defendants over their “deceptive” solicitation commercials, with the court finding, “under facts nearly identical to those [in this proposed class action],” that a reasonable jury could conclude Kars4Kids’ ads were misleading, as they indicate that donations would benefit needy children in the United States “when [they] actually benefited primarily children of a particular faith in a particular geographic location.”

The case accuses Oorah of being the “creator and architect” of the allegedly fraudulent donation scheme, having created Kars4Kids and its ads featuring the catchy jingle soliciting consumers to “donate [their] car today” for “a vacation voucher and a tax deduction.” Further, Oorah itself is “no stranger to litigation” and investigations over the alleged false and deceptive advertisements, its “questionable financial dealings” and its purported outreach activities, the suit states.

According to the lawsuit, the Kars4Kids advertisements are “clearly designed” to make potential donors believe the charity will use their car donation to benefit local children regardless of racial, ethnic or religious affiliation.

“What the ads fail to inform donors, however, is that their donations are instead simply transferred to Oorah to fund its promotion of orthodox ideology to Jewish families, to the exclusion of all others, predominantly in New York and New Jersey,” the lawsuit claims. “The ads also fail to inform donors that the vast majority of donation proceeds are not used for any charitable purpose and are instead retained by Kars4Kids and Oorah to fund their significant expenses and investments.”

The lawsuit specifies that while promoting the tenets of Judaism may be a worthy endeavor for donors who intend to do so, Kars4Kids and Oorah allegedly “designed their ads to conceal this true purpose from potential donors.”

The case calls the alleged Kars4Kids donation solicitation scheme “a racketeering enterprise” through which the defendants employed deceptive and misleading ads to solicit vehicle donations under false pretenses, using both wires and mails of interstate commerce to do so.

“Through this pattern of racketeering, Defendants deceived tens of thousands of unwitting donors into donating their vehicles to surreptitiously fund Oorah,” the complaint charges.

The Kars4Kids class action lawsuit looks to cover all persons who, within the applicable statute of limitations period until the date notice is sent to proposed class members, were exposed to Kars4Kids TV, radio or internet ads and donated a vehicle to Kars4Kids, except consumers in Pennsylvania and Oregon.

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