Used Car Scams

 

The Internet is becoming very popular for used car scams. Buyers from all over the world can bid on vehicles in Internet auctions or place offers on vehicles advertised over the Internet.

The scammer may steal images from a car dealer and pose online as the car dealer. The vehicle picture and details are also stolen from the dealer site.

They may also appear online as the seller of a used car. They may place ads on Yahoo Motors, ebay Auctions, ebay Motors, AutoTrader, or Craigs List.

Most auction sites on the Internet has been used.

Not all used car scams exist on the Internet however, and you may find them if you answer an ad through the newspaper, Green sheet or Craigslist.

Types of Used Car Scams

Internet used Car Scams

The seller starts by posting an ad on an auction site for their car. The scammer replies and is happy to pay the asking price, plus some extra.

The reasons given for the overpayment vary but are commonly to cover shipping to a foreign country, or because someone owes the buyer some money and they are using this debt to purchase the vehicle.

After a short delay, the scammer sends the buyer a cashier's check [counterfeit] which is banked and the seller can then withdraw on the funds in 1-2 days.

The scammer now requests that the difference between the vehicle purchase price and the cashier's check [often $5,000 - 10,000] be sent to the shipping agent.

Weeks later the bank advises the seller the check is counterfeit. The seller has now lost the money sent to the shipping agent, the buyer vanishes, and the vehicle is never picked up.

The shipping agent's account is closed and the buyer's contact details go unanswered.

The Internet Fraud Center has posted this warning about the used car scams:

"The scheme targets individuals that use Internet classified ads to sell merchandise. Typically, an interested party located outside the United States contacts a seller. The seller is told that the buyer has an associate in the United States that owes him money. As such, he will have the associate send the seller a cashier's check for the amount owed to the buyer. This amount will be thousands of dollars more than the price of the merchandise, and the seller is told the excess amount will be used to pay the shipping costs associated with getting the merchandise to his location. The seller is instructed to deposit the check, and as soon as it clears, to wire (Western Union) the excess funds back to the buyer, or to another associate identified as a shipping agent. In most instances, the money is sent to locations in West Africa (Nigeria). Because a cashier's check is used, a bank will typically release the funds immediately, or after a one or two day hold. Falsely believing the check has cleared, the seller wires the money as instructed. In some cases, the buyer is able to convince the seller that some circumstance has arisen that necessitates the cancellation of the sale, and is successful in conning the victim into sending the remainder of the money. Shortly thereafter, their bank notifies the victim that the check was fraudulent, and the bank is holding the victim responsible for the full amount of the check."

The scammers also pose as the vehicle seller. They steal the images and details of dealers or other buyers and post them as their own auction, usually with a unrealistically low price.

If you reply and wish to proceed, they want you to use an escrow service they have used before [scammers own escrow site]. Usually the scammer's communications are written in poor English. They want you to send the funds to the escrow company by Western Union or Moneygram!

They often agree to pay shipping for the vehicle as it is out of the country. A big red flag of used car scams.

used car scams

General Advice to Avoid Used Car Scams

  • Many scams begin by offering unrealistically good deals such as offering a brand new Mercedes for $15,000? These offers are designed to get your attention and then get your money
  • Talk to the buyer or seller by phone and find out where the car is located. Ask if you can inspect the car, even if you don't plan to do so. Also ask if the title is clear and in their possession
  • People who are in a different country usually have a good choice of vehicles for purchase. Why would they pay thousands of dollars in shipping to import your vehicle, plus pay the full asking price you want?
  • Never respond to second chance offers on eBay as almost all of them are scams.
  • Never use an escrow recommended by the seller or buyer
  • Never use Western Union to pay for online purchases
  • If you are using an auction site, don't use the seller's feedback as a guide to them being legitimate as very often scammers hijack accounts for the sale process[check if the ID has changed within the last 30 days]
  • Check the authenticity of the escrow company you plan to use by checking it is  licensed. Visit their website by typing it into your computer address bar, and not by using a link in an email. Call them and speak to a representative. Don't use an escrow company specified by the buyer or seller as it could be fraudulent
  • Choose an escrow company yourself and check the online escrow company's web site for poor content, spelling or grammar errors. Do a WHOIS check on Register.com for the domain name to see how long the website has been around
  • Keep clear of sites that require you to set up accounts with online payment services. Legitimate escrow companies don't use person-to-person money transfers like Western Union or MoneyGram or direct you to send your payment to an individual rather than a corporate entity. They are signs of used car scams
  • Fraudulent escrow sites often display logos from the Better Business Bureau, VeriSign Secure, TRUSTe, and even the Internet Fraud Complaint Center. They work on the assumption that you won't check them out. Check to make sure the escrow company is actually endorsed by these organizations
  • Avoid escrow company sites ending with domain names such as .org, .biz, .cc, .info or .US
  • The best advice is to use Escrow.com recommended by eBay
  • NEVER use cash wiring services such as Western Union, Moneygram, E-gold etc to pay for purchases online
  • Don't give out your financial or personal information [Social Security number, credit card number or bank account information] until you are sure the online escrow company you are using is legitimate
  • Never accept payment which does not exactly equal your selling price - no matter how profitable it may appear to you!
  • Shipping or other payments to third parties are not your responsibility
  • Watch out for ads that mention the price in USD. It is almost always a scammer especially in used car scams
  • Always check the driver's license of anyone you are selling a car to
  • When you are selling your car to someone you don't know, choose someone you trust [like your attorney or bank] and get them to hold the title in escrow until you are certain the payment transaction cannot be reversed
  • Under Federal Banking Regulations, a bank must make funds you deposit available to you within a couple of days. If you deposit a cashiers check, the bank must let you withdraw cash by the next day, even though the funds haven't cleared. This may take a couple of weeks, or in some cases up to a month. If the check proves to be fake as sometimes happens in used car scams, the amount will be deducted from your account

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