Cash for Clunkers Scams - scambuster.com Enewsletter

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Cash for Clunkers Scams Flourish Amid Confusion
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American motorists seemed to burn through the initial money in the government's CARS program in record time -- but not fast enough to stop crooks from launching a spate of what have become known as "cash for clunkers" scams.

And they carried on scamming even when the program almost ran out of money (although more funding has now been appropriated, and the program is now expected to go through Labor Day, if not longer).


Clunkers scams run wild in car buying frenzy

Officially the program was called CARS -- for Car Allowance
Rebate System -- but the government program that offered big discounts for trading in gas guzzling autos for more fuel efficient models quickly became known as "cash for clunkers" 2009.

Within 24 hours of the announcement of the plan, we had cash for clunkers scams too!

And that was even before the program actually launched in late July 2009.

There was just so much confusion and such a frenzy of pent-up demand for the deal, it was just a natural for the crooks.

Then, even when the program ran short of cash, the scammers were still busy pretending otherwise: that you could still get a clunker rebate.

The program works by giving credits of up to $4,500 when
buyers trade in their old clunkers, which are then scrapped.
But the qualification details behind it are not so simple.
(See Cars.gov for more details of the cash for clunkers bill.)

http://clicks.aweber.com/y/ct/?l=GRf...uCm9wnJFWQtESQ

Exploiting the confusion, the clunker scam merchants set up scores of official-sounding websites supposedly offering
advice and an easy route to the credits.

Many of these sites said people had to pre-register for the
program. And of course, victims were then asked to key in
personal information including Social Security numbers. This was a straight phishing attack followed by identity theft (you can find more on phishing and on identity theft here).

http://clicks.aweber.com/y/ct/?l=GRf...AtbpSvSnuGTWMQ

http://clicks.aweber.com/y/ct/?l=GRf...785ZppicD1O5jA

Other cash for clunkers scammers charged a fee either for
bogus vouchers they claimed were part of the program or for a list of authorized dealers who were supposedly part of the program (in fact, all dealers can take part).

On the other side of the fence, car buyers have been trying to work their own cash for clunkers scam, buying cheap autos then attempting to trade them in for the full credit. It doesn't work -- buyers have to prove they owned the trade-in vehicle for at least the prior 12 months, and that it was insured (i.e., being used!).

The Federal Trade Commission (FTC) has issued a consumer alert on the cash for clunkers scam, making clear that the cars.gov site mentioned above is the only legitimate source of info on the program.

http://clicks.aweber.com/y/ct/?l=GRf...zvXKnMigT2qPmw

With the extra $2 billion recently injected into the program
that we mentioned above, the CARS program is now supposed to be funded until Labor Day 2009 (or perhaps even longer) -- if the cash doesn't run out before then.

And even if that happens, the cash for clunkers scam leaves us with another important lesson: always find and check the official sites for any government program, especially those that give away money!