Safety from Vehicle Scams and Fraudsters when Buying and Selling Vehicles

Introduction

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.

Safety Tips to prevent Getting Scammed

With the necessary caution buyers and sellers can protect themselves from scamsters/ fraudsters. We would like to offer the following suggestions:

Get to Know /Identify the Buyer / Seller

Profile the buyer and find if he/she is a legit buyer/ seller.
Speak with the buyer on the phone. Ask buyers to give you their phone number and set up a time to chat; the swindlers will quickly disappear.
As you talk with the potential buyer, pay attention to your intuition.
If the buyer makes any unusual requests or if anything makes you uncomfortable, just wait for another buyer.
Be cautious of a seller who is hesitant to meet in person, and do not spend money on a car you have never seen.
Beware of curbstone dealers. There is likely a reason that they are trying to bypass the rules licensed dealers need to follow, like guaranteeing money back if the car ends up being a lemon.
Curbstone dealers are often transient or, at the minimum, difficult to locate and track down.

Identify the Vehicle to be Bought

Check the Vehicle History - ask for the vehicle identification number, or VIN, and do your own research/ investigation.
Check that the Vehicle Identification Number (VIN) matches the number on the owner registration and roadworthy documents and that the VIN number on the car has not been tampered with.
Checking the VIN on several locations on the vehicle for consistency to identify cars that have undergone major reconstruction or even possible theft.
Always do a history check on the vehicle to ensure that it is not stolen and that the car's details match those on the ownership registration and roadworthy documents.
Check that the seller's address matches the address on the registration and roadworthy documents
With online listings, the experts recommend copying a picture from the listing and doing a reverse-image search on Google. If the car shows up on multiple sites in multiple cities, you can bet that it is a fake.
Research the car's value by searching for similar models on vehicle retail websites.
If the value of the car is far below what it should be, it could be a scam.

Check and Confirm Accurate Mileage /Odometer Readings

Compare the odometer reading with the vehicle’s other features.
You should not see worn-out tires and a damaged interior on a supposedly barely driven vehicle.

Follow the Money

Before agreeing to meet, tell a prospective buyer you accept only cash.
If the buyer insists on paying with a cashier’s check, arrange to meet at the bank and watch as a teller handles the payment request.
Always use a traceable payment method instead of cash when completing the purchase as well.

Do not be Overeager

Do your research on the car’s market value before engaging with a seller.
Remember that real buyers will have questions about the car.
Do not be pressured into anything – if in any doubt about a particular telephone call, hang up.
Do not give your banking, credit, or debit card details to people you do not know.
Stop, think and be sceptical if you are cold-called and asked for money in advance.
Be cautious if promises are made that give the impression that:
there are immediate buyers for your car
finance has already been arranged for potential buyers
buyers are willing to pay your asking price or more
buyers are ready to view your car immediately, or
you will be offered a refund if the car does not sell
The Golden Rule: - if the price seems too good to be true, it probably is.

Do the Deal/ Vehicle or Money Exchange in a Safe Zone

You can take many variables out of the equation by insisting on certain ground rules.
Always meet with the seller in person, preferably in a public place
In many urban areas, police departments are creating “safe zones” with video surveillance. These are good places to meet prospective buyers.
If no such safe zone is available, meet in a well-lit public place with plenty of people around.
If you have any suspicions about a potential buyer, ask to see the buyer’s driver’s license before letting him or her drive your car.
If you suspect fraud or are a victim of a scam, contact your nearest Police station immediately

Ask a Knowledgeable Friend

If you feel vulnerable and you are not an automotive expert, use the Ask a Friend option! Take him/her along for the deal, inspection, or test drive.
Unless you have a mechanical background or sufficient knowledge of cars, your untrained eye might not realize that high-end parts have been replaced with subpar pieces or that the airbags are missing.
Your mechanic will be able to tell you if there's anything wrong with the vehicle, so ask the seller if a trusted auto expert - not the one the seller supposedly hired - can look it over before you commit.
If a seller will not allow you to take it to a mechanic before you buy, immediately cancel any possible purchase transaction.

Do a proper Test drive

If you purchase a vehicle insist on doing a proper test drive!
Unless you are offered a realistic driving scenario, you will not be able to tell how the vehicle drives and whether it has been through proper maintenance.
Ask for a longer test drive; a seller who refuses might have something to hide.

Listen and Do Not be Misled by Falsehoods to gain Sympathy and Trust

Buyers are often approached with some emotional appeal to conclude the transaction.
They are pushed to pay quickly - because of some fake emergency - before they can think twice or get advice from someone else.
Slow down, ask questions and avoid becoming emotionally involved in a vehicle purchase.

Be Cautious of False Security of Payment Sites

Do not automatically trust an escrow site that a seller recommends.
Ensure that the safest payment method is used – Ask yourself – What could possibly go wrong?

Caution when Selling your Vehicle

Experts also recommend the following safety steps when selling a vehicle:

Check and confirm the identity of a potential buyer.
Meet at a safe public venue to avoid criminals taking forced possession of your vehicle.
Never allow a potential car buyer to test drive the car alone, it may even be required to take another person on the test drive with you.
Ensure that the potential buyer has a valid driver’s license and sufficient insurance in case of an accident occurring while on the test drive.
Do not leave the car or the keys unattended or left in the ignition. A key swop is a common method used by criminals to steal a car.
Be wary of car buyers who do not want to view the vehicle in person.
Be wary of payments made by cheque. If a buyer pays with a cheque, wait until the check has been verified, cleared, and given value by the bank before transferring ownership or handing over the vehicle.
If the buyer wants to pay with cash, arrange to meet at the bank where the cash can be verified and banked safely

Remember: An informed buyer and seller are a safer buyer and seller!