A California court has issued a major ruling against Kars4Kids, finding that the charity violated California’s False Advertising Law and Unfair Competition Law through misleading advertising connected to its long running “1-877-Kars4Kids” vehicle donation campaign.
The ruling was issued on May 8, 2026, after a full trial on the merits in Puterbaugh v. Oorah, Inc. and Kars4Kids by Judge Apkarian of the Superior Court of California, County of Orange. The Court found that Kars4Kids intentionally misled donors through the use of a deceptive advertising jingle and permanently enjoined Kars4Kids from using the deceptive television and radio advertising in California.
The Court concluded that California donors would reasonably assume their vehicle donations benefited a general class of children, including children in California. Instead, the Court found that the vast majority of funds went to Oorah, a related organization supporting Orthodox Jewish programs in New York, New Jersey, and Israel.
The Court described Kars4Kids’ conduct as an “actionable strategy of deception” and found that the advertisements concealed material facts from donors at the point they were induced to donate valuable property.
How the Case Began
In 2021, Bruce Puterbaugh, a California cabinet maker in his 70s, donated a car to Kars4Kids because he wanted to help poor and needy children in California. According to the ruling, he had heard and seen the Kars4Kids advertisement “over and over” and believed the organization helped underprivileged children throughout the United States, including children in California.
The advertisement featured several children between the ages of 8 and 10 repeating the familiar jingle multiple times:
“1-877-Kars4Kids
K-A-R-S Kars for Kids
1-877-Kars4Kids
Donate your car today”
After making his donation, Mr. Puterbaugh discovered that the funds did not stay in California and did not benefit needy children in the way he believed. Instead, he learned that the proceeds supported a specific religious mission in the Northeast United States and in Israel.
Mr. Puterbaugh then hired Anthony G. Graham of Graham & Associates LLP and Neal A. Roberts of Protectus Law to investigate the organization and bring claims under California’s False Advertising Law and Unfair Competition Law.
What the Court Found Misleading
In the final order, the Court found that approximately 60% of the funds went to Oorah, which supports Orthodox Jewish programs in New York, New Jersey, and the Middle East, with no geographic nexus to California. The Court also found that children, especially needy or underprivileged children, were not the recipients of the proceeds of the donations.
The Court noted that using donated funds for “gap year” trips to Israel for 17 and 18 year olds or a $16.5 million real estate acquisition in Israel contradicted the needy child impression created by the advertisement.
The Court also found that the name “Kars4Kids,” the use of 8 to 10 year old actors, and the repetitive jingle all reinforced the belief that donations were used exclusively for the benefit of children.
However, during cross examination, Kars4Kids’ COO, Esti Landau, admitted that the organization’s primary purpose is to help “Jewish kids and families throughout their lives.” The evidence also showed that the organization funds matchmaking services aimed at young adults and gap year programs for 17 and 18 year olds.
Why the Court Found the Omissions Material
The Court found that Kars4Kids failed to disclose several material facts to donors. These included that funds benefited adults and families, that the support was contingent upon a specific religious affiliation, that funds did not go to California children, and that the funds did not go to needy or underprivileged children in the way donors would reasonably expect.
According to the Court, a reasonable consumer donating to a “kids” charity would attach importance to the fact that the donation was actually supporting adult matchmaking services and general family subsidies.
Under California’s False Advertising Law, advertisements can be unlawful even when they contain true statements if they are misleading by omission and have the capacity, likelihood, or tendency to deceive the public.
Judge Apkarian concluded that Kars4Kids disseminated public statements concerning vehicle donations that were misleading by omission. The Court found that Kars4Kids was charged with knowledge that California donors would reasonably assume their contributions benefited a general class of children, including children within California.
The Court’s Findings Under California’s Unfair Competition Law
The Court also found that Kars4Kids violated California’s Unfair Competition Law because its advertisements were fraudulent and unfair. The Court determined that the material omissions and failure to disclose the true beneficiaries of the donations were deceptive.
The Court stated that the omissions were inherently deceptive because the advertisements created false assumptions while saying nothing about the organization’s religious focus, geographic focus, adult beneficiaries, matchmaking services, or family subsidies.
The Court rejected Kars4Kids’ argument that, as a charity, it was protected by the First Amendment from liability for the advertising. The Court found that although charities have free speech rights, the government may regulate misleading commercial speech, and fraudulent omissions in an inducement to donate property are not protected free expression.
The Court also rejected Kars4Kids’ argument that consumers should independently research the organization online before donating. The Court held that donors were deceived when they responded to the broadcast solicitation.
The Permanent Injunction Against Kars4Kids
After evaluating the Kars4Kids program in California, the Court noted that the advertisement had run for decades and that, if the ads continued, thousands of California donors would surrender valuable property while continuing to be misled.
The Court emphasized the State of California’s interest in preventing consumer fraud and protecting transparency in the charity marketplace. Judge Apkarian found that when a charity generates millions annually through a jingle that conceals its primary religious and geographic focus, it creates an unfair playing field for local California charities that are honest about their missions.
The Court permanently enjoined Kars4Kids from broadcasting the jingle or any variation of it in California unless the advertisement contains an express, audible disclosure of its religious affiliation, the geographic location of its primary beneficiaries, and the age of its beneficiaries.
The Court also ordered that any future advertisement must clearly and conspicuously specify the actual age range of the primary beneficiaries. Kars4Kids may no longer use images of prepubescent children to solicit donations that support individuals who have reached the age of majority.
A Major Ruling for Charity Transparency
The ruling represents a major victory for charity transparency and accountability in fundraising. The Court made clear that charitable organizations are not exempt from consumer protection laws and may be held liable when advertising creates deceptive impressions through omission rather than direct false statements.
“This ruling reinforces a fundamental principle: charitable organizations cannot mislead the public to create one impression while concealing material facts from the donating public,” said Neal Roberts, Esq. “Transparency and honesty matters, and donors have a right to know exactly who their contributions are benefiting.”
The decision is expected to have significant implications for nonprofit advertising practices nationwide, especially for organizations that rely on television, radio, and mass fundraising campaigns.
A link to the ruling is available here: Kars4Kids California False Advertising Final Ruling.
Related Federal Class Action
A separate federal class action seeking restitution for donors allegedly deceived by Kars4Kids’ advertising is also pending in San Francisco. That case is titled Pavel Savva et al. v. Kars4Kids Inc. and Oorah Inc., Case No. 4:25-CV-09498-YGR, in the United States District Court for the Northern District of California.
The federal lawsuit includes claims based on the same alleged violations of California’s False Advertising Law and Unfair Competition Law on behalf of a California class, as well as Federal RICO claims on behalf of a nationwide class.
The plaintiffs in the federal class action are represented by Protectus Law and Keller Grover LLP. A link to the federal court complaint is available here: Kars4Kids False Advertising Class Action Complaint.