Le Lézard
Classified in: Environment
Subjects: RCY, CSR

Fraud In Bottle Deposit System Out Of Control; Costing Consumers Hundreds Of Millions Of Dollars Annually, Consumer Watchdog Reveals


LOS ANGELES, Jan. 7, 2022  /PRNewswire/ -- Recycling scams are costing California consumers potentially hundreds of millions of dollars in nickel and dime deposits stolen through fraudulent bottle and can refunds, Consumer Watchdog said today.

"Experts and insiders point to fraud rings that consist of crooked recycling centers and recycling processors as the source, along with an antiquated paper system of checks and balances run by the state that is easily fooled because it has not been fully digitized," the group said in its latest investigative report on the bottle deposit system's dysfunction, "Cash For Trash: Recycling Fraud in California."

Read the report here.

The report points to the need for a modern, automated bottle deposit system, like those in other bottle deposit states. This year California's Assembly will take up legislation already passed by the state Senate-- SB 38 (Wieckowski) -- to establish such a system run and managed by the beverage companies.

"California's bottle deposit program is run largely on a recycler honor system to claim payments from the state for bottle and can redemption," the report finds. "This reimbursement system uses state-set formulas easily manipulated by unscrupulous recyclers and waste haulers with little sophisticated scrutiny by regulators. Not a single other bottle deposit system in the continental United States emulates and copies California's. Instead, other bottle deposit systems put the responsibility onto the beverage industry to run bottle deposit programs and give them a stake in it. This helps to eliminate fraud because beverage producers lose money if they allow it."

"Fraud occurs when deposit containers are recycled more than once; when recycling centers and processors that buy materials from them for resale fudge the record-keeping, including the weight of loads used to calculate state payments; when out-of-state deposit containers on which no deposit was ever paid are redeemed; and when California non-deposit beverage containers are passed off as deposit beverages for state deposit refunds," the report continues.

Among the report's recommendations:

The report describes common fraud tactics including:

"The state's recycling regulator, CalRecycle, is clearly unable to effectively and thoroughly contain fraud," said the report's author and advocate Liza Tucker. "It also appears that Governor Newsom has no plan to shut down fraud, and the Administration needs to come up with one. The Governor has made it clear that he wants to build a circular economy that maximizes recycling to minimize waste, cut pollution, and save energy. Massive fraud in the system is only getting in the way of that vision."

For more on the dysfunction of the bottle deposit system, see Consumer Watchdog previous reports:

Waste Haulers: Square Peg In the Circular Economy
https://www.consumerwatchdog.org/report/waste-haulers-square-peg-circular-economy
Trashed: How California Recycling Failed And How To Fix It
https://www.consumerwatchdog.org/report/trashed-how-california-recycling-failed-and-how-fix-it
Half A Nickel: How California Consumers Get Ripped Off On Every Bottle Deposit They Pay
https://www.consumerwatchdog.org/report/half-nickel-how-california-consumers-get-ripped-every-bottle-deposit-they-pay

SOURCE Consumer Watchdog


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