The German rental car company Dexcar may have cheated thousands of drivers in Germany and abroad. Local media report a Ponzi scheme run by the company may be the biggest fraud of its kind ever perpetrated in Europe.
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State prosecutors in Germany are investigating the Essen-based car rental company Dexcar over allegations that it ran an illegal Ponzi scheme, defrauding customers across Europe, German media reported Monday.
The scheme could be the largest ever run by a rental car firm in Europe, according to the reports.
The allegations
According to information gathered by the German daily Süddeutsche Zeitung (SZ) and broadcaster WDR:
Dexcar is suspected of having cheated several tens of thousands of customers across Europe.
The company promised customers they would drive a new car for 24 months for a relatively small down payment.
Many customers have waited for years for vehicles they have already paid for.
Of 40,000 cars ordered, only 500 have been delivered.
Austrian consumer advocate Paul Rusching, who is familiar with the case, was cited by SZ and WDR as saying the system was "mathematically completely impossible, let alone financially." Using information from a Dexcar brochure as a basis, he calculated "that a rental car would cost the driver three cents per day," which was not financially viable. He said he suspected an illegal Ponzi scheme.
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What does the company say?
Dexcar founder and manager Mario Gai has denied the allegations, according to SZ and WDR, saying his firm is the target of a defamation campaign. The reports say the company has vacated its Essen premises and is now operating from Belarus as a mainly online service.
What is happening with investigations?
In Germany, state prosecutors from the western city of Bochum who are specialized in economic crime are investigating the company over the allegations. SZ and WDR say that investigations in Austria and Italy are also underway and that the anti-trust authority in Italy has also imposed a €400,000 fine on Dexcar.