During a tough economic environment, many purchasing decisions are based not on thoughtfulness but on desperation. This is a time when buyers and sellers of vehicles need to be extra cautious of fraudsters targeting their financial and emotional vulnerability!
The internet has become an important tool in the hands of those scamsters wishing to hide behind anonymity when targeting the vehicle buyer and seller.
We may all have heard the term – if it sounds too good to be true it most probably is! In this section, we would like to share advice from the experts on potential scams and how to avoid becoming a victim of vehicle scams.
[We recognize that vehicle buyers and sellers are well protected through various laws and regulations when purchasing/selling through reputable and compliant dealers and online vehicle retail platforms. The focus will hence be on those scamsters and fraudsters with criminal intent not complying with the regulated environment.]
What is a Car and Vehicle Scam?
A scam can be defined as an intentional, deceptive, fraudulent activity with the intention of obtaining money or possessions from an individual. The person responsible for the scam is commonly known as a scammer.
Car scams nowadays can be presented in many ways and usually occur through the scammer using technology such as the Internet, E-mail, or SMS.
Online Vehicle Buying and Getting Defrauded
Easy and widely accessible online access have created many opportunities both for safe and legal vehicle sales, but also for those fraudsters targeting the vulnerable and less informed.
Scammers prefer to use email as a preferred method of communication.
Many buyers and sellers flock to online sites, wishing to maximize the value of their used car and speed up their trades.
Vehicle buying and selling, even though often performed online, also usually require a meeting with strangers, arranging test drives, exchanging cash and signing documents. It is important that buyers and sellers pay close attention to these processes to avoid getting scammed!
What are the Techniques Used in Typical Vehicle Scams?
It is important to be aware of some of the techniques and methods used to scam potential buyers and sellers. We have found some of the following:
- Scams often originate from some unusual financing request from the buyer.
- In a popular scam, the fraudulent buyer sends you a cheque with an additional amount to ship the car. You pay for the shipping, send the car and then the cheque bounces.
- Scammers may demand the full price of the car, or a deposit, to be transferred immediately.
- Once they have received money, they fail to release the vehicle and become difficult to contact.
- The scammer may also ask for money in smaller amounts rather than all at once. At first, it’s a deposit, then a payment, then shipping.
- Most often scammers hide behind bogus email accounts that provide no information about their whereabouts.
- They will refuse to provide sufficient contact details. The phone number provided is either faulty, remains unanswered or goes directly to voice mail
- Scammers will usually make an excuse for not being available via telephone.
- Scams are effective and succeed because of “the victim’s own eagerness to close a deal they think an opportunity not to be missed.
- Pricing of the vehicle is usually well below the market value.
- Scammers often use sad stories to gain sympathy or encourage the buyer to make a snap decision based on a hard-luck story. These include claiming to be deployed by the military, claim they have lost their job and will not be able to pay rent without selling their car.
- Vehicles are presented that do not actually exist. Scammers will copy and paste images from a real posting, then make fake listings in dozens of cities.
- Identical photos are found to be listed on dozens of sites across the country as scammers use the same photo over and over, with multiple victims.
- The more advanced scammer will create a false sense of security by referring to Escrow sites that are designed to protect the consumer.
- Buyers are tricked into thinking they are entering a safe agreement by spoofing an existing escrow site or setting up their own.
- The ‘virtual vehicle’ scam involves fake shipping websites that promise to handle and look after your money.
- Scams are not limited to the buying and selling process but also have found its way to acquiring insurance.
- Victims are targeted via social media and the ghost brokers forge insurance documents, change details on real insurance policies, or even cancel a holder’s policy without their knowledge and pocket the refund.
- Vehicle matching scams are used when scamsters approach owners who are selling their cars and promising falsely to match them with ‘definite buyers’.
- While advertising a car for sale in a magazine, newspaper or online seller is cold-called by telephone. The caller promises that they already have buyers lined-up who are looking to buy the same model – all the seller has to do is pay a matcher’s fee up-front before the buyer is introduced and the sale completed.
- Turning back the clock. Rolling back the odometer is one of the oldest tricks in the books.
- The number of miles that a car has driven is a good indicator of how much wear and tear it has gone through, so skimming milage off the top tricks buyers into thinking they have bought a practically new vehicle.
- Incorrect/ Hidden Vehicle History -There may be damage from an old accident or flooding that the seller is purposely trying to hide.
- Denying the vehicle buyer a proper test drive. Where the seller allows the buyer a test drive that can only be described as a drive around the block in an area where the speed limits are quite low.
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