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BBB Warns of Scammers Misrepresenting "Cash for Clunkers" Program

08-17-2009 10:45 AM CET | Business, Economy, Finances, Banking & Insurance

Press release from: BBB of Eastern North Carolina

/ PR Agency: articulon
RALEIGH, N.C. (August 5, 2009)—Better Business Bureau serving Eastern North Carolina ( is warning consumers to be wary of e-mail and phone calls attempting to exploit consumer curiosity about the "Cash for Clunkers" program.

The Car Allowance Rebate System—also known as Cash For Clunkers—is a government program that gives people a $3,500 to $4,500 discount when they trade in an older, less fuel efficient vehicle to purchase or lease a newer, more fuel-efficient one from participating dealers. The initial program is to expire when the $1 billion allocation is exhausted or on November 1, 2009, whichever comes first. The program has been so popular that the $1 billion in funding was exhausted Friday, July 31—one week after it had launched. A temporary extension was granted through August 2, but the future of the program is uncertain and awaits Senate approval of $2 billion in additional funding.

Scammers are taking advantage of the current confusion by offering consumers a voucher or the opportunity to have their name added to an application list, sometimes requiring a deposit or fee payment. The government program does not use vouchers or an application list and no deposits or application fees are necessary. Rather, participating dealerships process applications at the time of a purchase. The scam e-mails and phone calls are actually attempting to gather identity stealing information such as Social Security numbers. BBB reminds consumers to be extremely cautious when sharing personal information via, e-mail, over the phone or on the Web.

"With the program in limbo, consumers and automobile dealers are trying to sort through the confusion surrounding the future of the 'Cash for Clunkers' program," says Beverly Baskin, president & CEO of the Better Business Bureau serving Eastern North Carolina. "We urge consumers to be cautious and to do their research before providing personal information or paying any deposits and fees. As always one of the best research sources is BBB's Web site ."

The legitimate government program has several requirements that a consumer's current vehicle and the new vehicle they want to purchase must meet. The credit amount of $3,500 or $4,500 is applied to the purchase or lease price of the new vehicle dependent on the type of vehicle purchased and the difference in fuel economy between the old and new vehicle. Only participating automobile dealers that are registered with the government can determine the eligibility and the amount of credit due.

To find a participating dealer and to research government specifications for trade-ins and new car purchases, visit the U.S. Transportation Department's Web site explaining the program at, or call 866-227-7891.

In addition to exercising caution, BBB has the following tips concerning CARS:
• Avoid anyone who offers a money order, check or direct deposit for the rebate. Consumers can only benefit from CARS by getting the reimbursement amount reduced from the purchase price of a new vehicle.
• Discover the current value of the trade-in. If it exceeds $4,500, selling it or a normal trade-in value may be more cost-effective.
• Know the scrap value of the clunker. When the dealership takes possession of the gas guzzler, it may be able to sell specified parts, but the majority of the vehicle must be destroyed. Consumers can negotiate the new vehicle price to include the clunker, but it will only be worth the scrap value to the dealership. Dealerships are required to give consumers a scrap value estimate.
• According to, the program only works for purchasing or leasing new vehicles from a dealership; not used vehicles.
• Protect your personal information and understand contracts before signing. When purchasing a vehicle from a dealership, get buying tips and a free BBB Reliability Report on the business at
Consumers are able to report related schemes at, as well as internet or e-mail-based scams at

For more information on buying a car or to check out a dealership, visit

# # #

About BBB of Eastern North Carolina:
The Better Business Bureau serving Eastern North Carolina is a 501 (c)(6) not-for-profit corporation serving 33 counties in eastern North Carolina. The organization is funded primarily by BBB Accredited Business fees from more than 2,900 local business and professional firms. The BBB promotes integrity, consumer confidence and business ethics through business self-regulation in the local marketplace. Services provided by the BBB include, reports on companies and charitable organizations, general monitoring of advertising in the marketplace, dispute resolution services, and consumer/business education programs. All services are provided at no cost to the public, with the occasional exception of mediation and arbitration. Visit

BBB of Eastern North Carolina
5540 Munford Rd., Ste. 130
Raleigh, NC 27612-2655

Media Contacts:
Cindy Stranad

Beverly Baskin

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