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Avoiding Scams When Buying or Selling a Car
Scams have long
been a part of the used car business and even more so in the
private sector. Even though the internet has turned out to be a
good thing when it comes to doing business, it has opened up
plenty of new territory to scam artists wanting to rip off
innocent people.
The overpayment scam
A legitimate seller posts a car for sale. He or she is then
contacted by a prospective “buyer” (really a scammer) who offers
to send a cashier’s check immediately plus additional funds to
cover shipment of the car overseas. When the check arrives, the
seller is instructed to deposit it and wire the overage to the
“shipper.” When this is done and the wire transfer picked up,
the “buyer” breaks contact and the seller is left on the hook to
their bank for the fraudulent check and the missing funds.
Escrow scams
Many consumers are rightfully wary of sending large amounts of
money to someone they’ve never met. A scammer will frequently
recommend using a fake “escrow” service that will hold funds
involved in the transaction until both parties are satisfied
that the transaction has been completed. In a typical scam, a
legitimate buyer will be approached by a scammer selling a car
(again, often an antique or classic car priced, but usually
priced well below market value). The scam seller will offer to
ship the car and that there is no risk of fraud due to the
“escrow” service (purportedly something like eBay, PayPal, or
another service). Once the money is transferred, contact is
broken (or sometimes additional funds are requested to cover
“unforeseen” events). In any case, the legitimate buyer never
receives a car and loses their money.
Look for these warning signs that someone might be trying to
lure you into a scam:
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If it sounds too good to be
true, it probably is.
-
The buyer is asking you to
wire him money.
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The buyer is trying to avoid
meeting with you in person.
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The buyer uses email only for
correspondence, and the email is poorly or oddly worded.
-
The email exchange starts
with a legitimate question about the car, but quickly veers
into odd questions.
-
The buyer is located
overseas.
If the seller's asking price
seems to good to be true, it probably is. Many of these ads for
late model cars include a VIN or Car Fax certification. To offer
an incentive most scammers will include shipping as part of the
deal. Beware of low priced ads as a reason for selling the car.
A lot of scammers will throw out all kinds of excuses as to why
they are selling the car. Everything from they are dying with
cancer, to their mother or father has some deadly disease and
they need money for hospital treatments, etc. Inappropriate
requests for your personal or financial information are
definitely a warning sign, especially when requested early in
the process.
Take extreme caution when it comes to escrow companies. Scammers
can easily create a website that looks like a legitimate escrow
company, but in reality they are really just there to get your
money. Using a third party facilitator for long distance
transactions is good practice and there are hundreds of listings
for legitimate companies found in a web search.
Scammers will often request a deposit by Western Union wire
transfer because it's fast, they don't need ID and they can
receive it just about anywhere. Once they have your money, it's
gone! Avoid anyone that requests a Western Union money transfer.
Avoiding Scams When Buying or Selling a Car
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