Cash for Clunkers fraud investigation begins

Filed under: Car Buying, Government/Legal

Where there’s money, there’s fraud, and that appears to have been true with last year’s Cash for Clunkers program. According to a report from USA Today, the federal government is investigating around 20 dealers that may have violated the terms of the car-swapping scheme. So far, a total of nine dealerships have paid $71,500 in fines as a result of the National Highway Transportation Safety Administration’s findings.

In some cases, NHTSA suspects that vehicles meant for the scrap heap were actually shipped overseas and resold. Unsubstantiated reports claim that around 24 vehicles slipped out of the country in this fashion. Meanwhile, some junkyards have still yet to provide proof that other vehicles were in fact destroyed – a key piece of the process.

USA Today says that of all of the Cash for Clunkers claims, around 3.3 percent of the group have some sort of problem with their paperwork that may impact around $94 million in rebates. Even so, NHTSA says that there is no widespread fraud issue with the Cash for Clunkers program, and that the issues it has turned up are due to a few bad dealerships trying to work the system.

[Source: USA Today | Image: Justin Sullivan/Getty]

Cash for Clunkers fraud investigation begins originally appeared on Autoblog on Tue, 24 Aug 2010 16:25:00 EST. Please see our terms for use of feeds.

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