Car Buyers Beware: Nine Notorious Scams
Cars are big-ticket items, and there are many ways for fraudsters to bilk unsuspecting victims. The rise of Internet commerce has vastly expanded the ways to separate a mark from his money, and has effectively made Internet fraud a global business.
Consumer complaints rose 25 percent in 2010 and a complaint is filed every 90 minutes, according to a Consumer Reports article citing FBI stats. Regarding auto-related complaints, every hour a car buyer loses more than $1,000.
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“The number one piece of advice we can give for buyers and sellers is to listen to that inner voice that says, ‘This is too good to be true,’” advises the site’s spokesperson, Ron Hall, “because we've found that it always, always is.”
While it may seem like a no-brainer, never purchase a car or send money for a vehicle without seeing it first. “You'd be surprised at how many people do that,” he says.
The Cars.com fraud team put together this list of the most common scams in auto sales.
Keep in mind the schemes and tactics that follow are not mutually exclusive — some scammers take pages from numerous playbooks.
Scams involving checks (i.e. personal, cashier's, third-party checks, money order) take many forms. In a typical example, a thief posing as a car buyer “accidentally” sends a check made out for an amount higher than the selling price of the vehicle and requests that the seller deposit the check and return the difference via a wiring service (Money Gram, Western Union, etc.). After the seller has wired the money, he or she learns the buyer’s check is worthless, and the thief disappears with the seller’s money.
The Snopes page dedicated to check scams (including the famous strain originating from Nigeria) recommends waiting three weeks for any sizable check to fully clear. Even if it looks like the funds are available in the bank account before that time, checks could still turn out to be counterfeit.
Preying on the sympathy of a mark is one of the oldest tricks in the book. In a common auto scam, a thief posing as a seller supplies a sad story to a potential buyer about why he or she needs to sell the car quickly (he or she is about to be deployed on active military duty or is dealing with a divorce, illness, the death of a loved one, etc.). The sob story explains why the car’s asking price is so much lower than its current market value, and puts pressure on the buyer to make a quick decision. Buyers who fall victim to this scheme can end up with a lemon, or with no car at all.
In the shipping scam, a thief posing as a seller requests a deposit on a vehicle and promises to ship the vehicle to the potential buyer for personal inspection within a set number of business days. Typically thieves will tell prospective buyers a third-party shipping company will be in contact with the buyer to ship the car after the deposit is sent via wire service. Scammers often use forged or copied websites to appear legitimate. An investigation by the BBC revealed criminal gangs are often the perpetrators of shipping scams and other types of auto fraud.