Sense on Cents

Fraud begins with intentional misrepresentation. From there, revenues generated become captivating, the fraud grows, and society suffers.

The potential for fraud is my greatest concern with the ‘Cash for Clunkers’ program. Why?

With the economic tide having gone out, no surprise that more frauds have been exposed. Additionally, given the challenging economic times, we should not be surprised to see intentional misrepresentations laying the groundwork for more frauds in the future. Against this backdrop, I am not surprised by a Bloomberg report, Cuomo Tells Dealers to Stop Deceptive Clunkers Ads:

New York Attorney General Andrew Cuomo today told 40 auto dealers across the state to stop issuing misleading advertisements for the Federal Car Allowance Rebate System, known as “cash for clunkers.”

The government-funded clunkers program, which seeks to boost the economy, allows dealers to credit $3,500 or $4,500 for trade-ins that may be worth less. Dealers’ ads mislead consumers into believing that their trade-in vehicle qualifies for the program when it does not or that they are eligible for a several-thousand-dollar rebate, Cuomo said in a statement today.

Letters by Cuomo order the dealers “to immediately modify promotions and advertisements to clearly explain how the program works,” he said. Included on his list were dealers for General Motors Co., Chrysler Group LLC, and Ford Motor Co.,  as well as foreign car companies.

In metropolitan New York, Cuomo named Plaza Hyundai Ltd., City World Toyota and City World Hyundai, while in Westchester he cited Smith Cairns Ford Inc. of White Plains and Central Avenue Chrysler Jeep Dodge.

One would have to be quite naive to think intentionally deceptive ads are not widespread in our country. Are car dealerships hoping to target these ads to those who may be less financially savvy? If so, these misrepresentations are particularly heinous.

I would encourage AG Cuomo and other attorneys general to be intentionally aggressive in meting out penalties and punishments for those involved. As word of mouth is the best form of advertising and publicity, I only hope that this post is widely disseminated.

The need for honesty and integrity never takes a vacation.

Please share all thoughts and comments.

LD

FYI: Addendum to my August 5th post “Fair and Fraudulent Mortgage Lending.” Bloomberg is now reporting Freddie Mac Says Its Loss from Taylor Bean May Be ‘Significant.’

There is a reason why it smells so bad at low tide!!

This entry was posted on Monday, August 10th, 2009 at 3:12 PM and is filed under Auto Industry, cash for clunkers, General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.