November of every year is National Diabetes Month, a time when many gifts are made to the cause of fighting one of America’s most prevalent diseases. You may even have noticed a message on CVS checkout screens asking if you wished to make a donation, above and beyond your purchase price, to the American Diabetes Association (ADA).
However, according to a lawsuit filed by a New Yorker, this money is allegedly being used to repay a $10 million commitment that the pharmacy chain has already made to the ADA, unbeknownst to customers. The suit accuses CVS of engaging in fraud and violating consumer protection laws in all 50 states. In essence, it argues, CVS is guilt-tripping customers in the checkout line to reimburse its own charitable donations.
The plaintiff, a Staten Islander named Kevin McCabe, filed the complaint in May, but CVS responded several weeks ago with a motion to dismiss the suit, and both surfaced this week when an MIT Sloan School of Management PhD candidate, Emma van Inwegen—herself a diabetic—tweeted out a link to coverage by a legal news site that caused a viral outcry.
In November, CVS filed a motion to dismiss the lawsuit, challenging McCabe and his lawyer Todd Bank’s classification of that $10 million as CVS’s “debt.”
“CVS has no debt to the ADA,” the motion stated. Rather, what CVS agreed to was to fundraise from customers for three years—2021, 2022, and 2023—then give all that cash to the ADA. It would be CVS’s responsibility, however, to cover any gap between customers’ donations and that $10 million. Still, CVS’s motion argues: “Obviously, upon signing, CVS did not assume an unconditional $10 million debt to the ADA.”
In his lawsuit, McCabe specifically refers to an ADA charity campaign that CVS conducted in November 2021. His suit argues that he and everyone else who opted to donate money to the ADA through CVS during that time are entitled to damages. But according to the agreement CVS made, the $10 million commitment stretches over three years, meaning the same campaign should repeat in 2022 and 2023 as well.
Reached for comment by Fast Company, CVS strongly denied the allegations. “The claims asserted in this action lack merit, and we have filed a motion to dismiss that details the plaintiff’s inaccurate description of our campaign and its intent,” the pharmacy chain said. “We are proud of our 3-year collaboration with the American Diabetes Association (ADA) to support families in helping to prevent and manage diabetes, including our in-store fundraising campaign through which customers have, and continue to donate to the ADA.”
On his professional website, Bank, the lawyer suing CVS, calls himself “The ‘Annoyance’ Lawyer,” and explains that he represents plaintiffs in class actions dealing with cases about things like illegal robocalls and spam email and unpaid consumer rebates. The plaintiff, McCabe, has himself filed similar legal complaints against other companies. In 2016, he and Bank also sued Conagra Brands, arguing the company broke the law by misleading customers via a promotion to raise money to end child hunger, though the courts ultimately dismissed those claims.
Meanwhile, responding to their fraud case, CVS has separately claimed that Bank used an alias that didn’t identify him as an attorney to, in its eyes, underhandedly obtain details about the agreement with the ADA. (We’ve also reached out to Bank for comment and will update this post if we hear back.)
And of course, CVS claims their lawsuit simply misrepresents that agreement. Under it, CVS’s “principal financial responsibility” is clearly “to fundraise, not to donate,” its November motion says. “Thus, the ADA agreement expressly permits—and indeed requires—that CVS’s conditional promise be reduced by all amounts donated by its customers.”
But even if that is true, it’s not a nuance that seemed to matter to upset consumers. Many of the replies to van Inwegen’s tweet used words like “revolting” to describe the situation. Others were disappointed to learn that what appeared to be a direct way to put $1 or $2 into the ADA’s pockets may have been more circuitous than they’d thought.
There’s also anger at seeing a corporation openly tout $10 million to charity—”CVS Health announces $10 million commitment to the American Diabetes Association,” its press release read—only to later seemingly backtrack and clarify to a judge that well, actually, the company was fundraising on the charity’s behalf.
But there’s potential fallout for the charity sector, too. Since Monday, Twitter has been full of people telling van Inwegen—or just declaring on their own—that what they’ve taken from this situation is that they should simply stop donating to charities at checkout. But point-of-sale donation programs like the one CVS was offering usually are legitimate. Engage for Good says these programs have raised nearly $5 billion over the past three decades, and the charity-assessment group Charity Navigator is very direct about the fact that checkout donations are not a scam.
“I thought the worst thing that could happen would be tens of thousands of strangers calling me ugly or something,” van Inwegen tweeted on Wednesday morning. “But tens of thousands of strangers saying they’re going to donate to charity less because of me is much worse.”
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