Question

Cars 4 Causes was a nonprofit corporation that solicited donations of cars that it sold from its lot. It kept half the sales proceeds and after deducting towing costs, it distributed the remainder to charities. Cars 4 Cause advertised that it provided "free towing" of a vehicle from the donor's residence. Its advertising did not disclose that in fact it paid a fee to a towing company and deducted that fee from the portion of the sale proceeds it gave to charities. The state of California and its Department of Motor Vehicles sued Cars 4 Causes, alleging that it engaged in false advertising. Did it? Support your answer.

Answer 1

Yes, Cars 4 Causes engaged in false advertising by not disclosing the towing fee deducted from the donation amount to charities.

Step-by-step explanation:

Yes, Cars 4 Causes engaged in false advertising. The nonprofit corporation advertised that it provided "free towing," but in reality, it paid a fee to a towing company and deducted that fee from the portion of the sale proceeds it gave to charities.

This misleading advertising created the false impression that the towing service was truly free for the donors, when in fact, it was not.

In legal terms, false advertising refers to the act of making misleading statements or deceptive claims about a product, service, or organization.

It is a violation of federal and state laws that are put in place to protect consumers from being misled or deceived. In this case, by not disclosing the towing fee and deducting it from the donation amount to charities, Cars 4 Causes deceived donors by giving them a false expectation of free towing.

By not providing accurate information about the towing process and fees, Cars 4 Causes engaged in deceptive practices and violated California's false advertising laws.

The state and its Department of Motor Vehicles rightly sued the nonprofit corporation to hold it accountable for its misleading actions.