One of the biggest concerns facing the NHTSA, aside from getting every new car dealer registered in the country by July 24th, is limiting fraud.  With cash credits of $3,500 and $4,500 in play, fraud prevention must be carefully planned at both the government level and at the dealer level.

Car dealers will have a “playbook” from the NHTSA lawyers when the program starts around July 24, 2009 which will include the required forms and paperwork that must be collected.  

Dealers will need to complete the NHTSA  forms and collect and scan documents from consumers  and send them to the NHTSA to review.  This creates some added processes and procedures for cars dealers but they will have to be compliant to get paid.

Creating Rules Will Not Be Easy

Does the person whose name appears on the title have to be present at the transaction? 

Since the cars will be crushed after they are traded-in, there is a grave consequence for cars that are qualified that were fraudulently submitted.  There will no recoverable vehicle to undo the trade.  It looks like the person whose name is on the title will need to be present and have proper identification.

What if my state does not require insurance?

There is also concern about how to make sure that continous insurance and registration can be proven.  State regulations regarding insurance, registration and titles vary greatly so process is not that simple.  When processes get complication it makes it easier for fraud to slip into the system. 

The NHTSA lawyers have their hands full interpreting the law to make rules that can work nationwide.  Send them some coffee gift cards since they will be up around the clock this month.

Consumers and car dealers are advised to wait until ALL the program rules are published by the NHTSA around July 24, 2009.  The NHTSA has the authority to levy  fines of up to $15,000 per fraudulant transaction.  Everyone is encouraged to play by the rules and wait till the rules are published.

Be patient..the NHTSA has a big task to complete in a short amount of time.

Tags: cash for clunkers crimes, cash for clunkers fraud, nhtsa fraud prevention