CALIFORNIA (KCAL) — Kars4Kids ads are banned in California after a judge ruled that the charity violated false advertising and unfair competition laws by using donations to pay for teenagers’ trips to Israel and a $16.5 million building there.
The court case began in 2021, when Bruce Puterbaugh sued Kars4Kids, saying he “felt taken advantage of” when he learned his donation would not go to “underprivileged kids from all over the U.S.,” according to court documents.
The organization’s radio and television ad has become notorious for its earworm of a jingle, which repeats the phone number 1-877-Kars4Kids.
Puterbaugh said he decided to donate a broken-down car left at his home after hearing the ad “over and over” again on the radio. Viewing himself as a “charitable person,” Puterbaugh donated the car with the understanding that the funds would go to children in need, specifically in California.
After making his donation, he learned that the funds went to Oorah, a company dedicated to Jewish heritage and summer camps in New York and New Jersey. In a testimony that the judge described as “strikingly candid,” the company’s chief operating officer, Esti Landau, said her organization does not primarily focus on helping economically disadvantaged kids, according to court documents.
She testified that Kars4Kids is the primary funding source for Oorah. She admitted that the donations funded “matchmaking programs” for young adults and trips to Israel for 17- and 18-year-olds, according to court documents. In her testimony, she added that the company spent $437,000 on Middle East outreach and used the funds to purchase a $16.5 million building in Israel.
In its reasoning for the ruling, the court stated that the advertisements were misleading by omission and stated that the Kars4Kids name, paired with the advertisements were “likely to deceive the public.”
Kars4Kids blasted the ruling, saying in a statement that they expect to win their appeal and describing the case as a “lawyer-driven attempt to siphon off charitable funds for their own gain.”
“We believe this decision is deeply flawed, ignores the facts, and misapplies the law. It’s well known that we are a Jewish organization and our website makes it abundantly clear. Take a look and judge for yourself: kars4kids.org,” a spokesperson wrote.
Puterbaugh testified that he was not computer-savvy and followed “the ad’s directive to call the 877 phone number.” The judge presiding over the case sided with him, writing in court documents, “consumers act reasonably by calling that number rather than cross-referencing a website.”
Kars4Kids must pay Puterbaugh $250 and has 30 days to pull the ads in California.
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