Scams Pose As 'Cash For Clunkers' Program

By Karina Nova
WBNS-10TV

Michelle Starcher sees a real opportunity in the federal government's "Cash for Clunkers" program.

"We have an old '92 Ford that we want to trade in," the Guernsey County resident said. "I can get up to $3,500, which is a big incentive to buy a new car."

Formally known as the Car Allowance Rebate System, the $1 billion program is intended to help revive the country's slumping auto industry by encouraging consumers to replace their gas guzzlers with more-fuel-efficient vehicles.

Unfortunately, prospective car-buyers such as Starcher aren't the only ones hoping to take advantage of the program. According to government officials and consumer watchdogs, plenty of con artists are also eager to get mileage out of it.

"Scammers often try to piggyback on new programs or trends, and this is no exception," Ohio Attorney General Richard Cordray said.

Scammers have benefited from confusion that arose after the "Cash for Clunkers" law was signed last month, consumer advocates say.

At that time, some rules were clear: To qualify for credits of as much as $4,500, for example, trade-ins would have to be less than 25 years old and get 18 miles per gallon or less in combined city/highway driving.

Other details of the program, however, still had to be hammered out, leaving many interested consumers unsure how to proceed.

Con artists stepped into the information void, and scores of unofficial "Cash for Clunkers" Web sites began popping up.

Many claim -- falsely -- that consumers must preregister to participate in the program. Some ask for addresses, phone numbers and Social Security numbers, none of which is required. Others promise to put consumers in touch with "authorized" dealers.

"Nobody should be fooled into registering or giving out personal information," Cordray said. "If anyone asks for that, it's a scam."

Dealers will do the bulk of the work under the program: If a customer trades in an eligible "clunker," the dealer will provide a credit based on the fuel-efficiency of the old car compared with that of a new vehicle. That will reduce the amount the consumer must pay for the new vehicle. The dealer will then scrap the trade-in and get reimbursed by the federal government.

The customer justs needs to show up with the trade-in's title, its registration and proof that the vehicle has been insured under his or her name for the past year.

"The biggest misconception is that I can go out and buy a clunker for $500 and trade it to the dealer for $4,500," said Marc Hellman, general sales manager for Ricart Automotive. "That won't work."

The incentive program will run through Nov. 1 or until the allocated funds are exhausted.

Starcher said she's taking no chances.

"I'm getting a lot of money off a vehicle, so I think it's a really good time to buy."

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