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.
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.