Internet auto scams: When a good deal isn’t really real
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Now, the alleged leader, Romanian fugitive Nicolae Popescu and six others who are named as co-conspirators, are listed on the FBI's Most Wanted list for Criminal Enterprise Investigations.
"Using forged documents and phony websites, for years Popescu and his criminal syndicate reached across the ocean to pick the pockets of hard working Americans looking to purchase cars," United States Attorney Lynch said in a statement.
Popescu and his co-conspirators were "masters of illusion," according to FBI Assistant Director in Charge George Venizelos.
"They siphoned funds from victims to fuel their greedy desires and created false identities, fake websites, and counterfeit certificates of title in order to make the scheme more convincing," Venizelos said in a statement.
And these alleged fraudsters are just a few of many.
Last year, victims of online car-buying scams lost more than $64 million, and more than 17,000 auto fraud complaints were made, according to the National White Collar Crime Center.
Buyers want good deals; but beware
The number one reason why a shopper is willing to buy a car online versus physically going to a dealership is price, according to a Capgemini annual report that examines consumer car buying globally.
Even professionals in the automotive industry look for deals online and are not immune to fraud. Tom Souter, who runs Classic Motor Cars in Lubbock, Texas, and who also appears on CNBC Prime's "The Car Chasers," had an incident back in 2005 that could have cost him thousands of dollars when he bought a 1957 Chevy Bel Air Coupe online that did not exist.
Souter said the advertisement for the car looked great and he even researched the vehicle identification number (VIN) the seller provided. But since the car was pre-1980, the time when VINs became standardized as 17 digits and which are necessary to run a more comprehensive history report, Souter was not able to locate the car's previous owner or its exact location.
Still, the VIN did check out as belonging to a 2-door, hardtop Chevy coupe. Souter talked with the seller a few times and everything seemed to check out, so he bought the car for $22,000.
"Turned out the guy stole an ad that had been a previous listing on eBay. He never owned the car, never had the car, so eBay paid me back $20,000 on the car," he said.
Souter was reimbursed through the site's vehicle buyers protection plan, which covers certain losses of up to $50,000 for some types of fraud when a shopper buys a car and pays for it through its website.
(Photo: Moyan_Brenn | Flickr)
Buying on free websites versus paid websites
But most sites do not offer such protection, especially sites where sellers can list ads for free. Since the advent of these free sites, the marketplace has become a tougher place to find a good deal, according to Souter's son, Jeff Allen, who buys and sells cars as the owner of Flat 12 Gallery and who also appears on "The Car Chasers."