Tips to Help You Avoid Online Car Buying Tricks

This is one of those tales of caveat emptor: buyer beware. Buying cars online, like purchasing so many other items over the Internet, has exploded in popularity. The ease and convenience of shopping online makes for an attractive shopping venue car detailer. But be warned, it makes for an attractive fraudulent target as well!

“Joan” (not her real name) thought she’d won an online auction for a 2001 Chrysler Town & Country minivan. She had bid $6000 in a legitimate auction for the vehicle, and was ecstatic when notified she had been the highest bidder. Had she examined the auction site more closely, however, she would have noticed that, curiously, she was not listed as the highest bidder-someone else was.

Imagine her chagrin when her family found out three weeks later that the $6000 they’d put in an “escrow account” toward the purchase of the vehicle had vanished, along with any hopes of receiving the vehicle.

Here’s how this scam worked: con artists regularly troll sites such as this online car auction which ran on Yahoo. They use legitimate sites retrieve that all-powerful identifying information to perpetuate their thievery on unsuspecting victims. The thieves in this case got Joan’s email address from the site, and contacted her, purporting to be the vehicle’s seller congratulating her on her supposed winningest bid. To further muddy the waters, the Yahoo online auction was actually a legitimate auction; the only thing fake was the phone call of congratulations and immediate request for payment (the vehicle’s true owner had no idea of the fraud being perpetuated in his midst).

Many of these scams work out of former communist or African countries such as Nigeria, the infamous home of the “Nigerian fraud” scam.

For every time we have been warned “if something sounds too good to be true, it probably is,” there is a con-artist replying with the expression “You can’t fleece an honest man.”

In Joan’s case, however, it wasn’t prosperity or even greed on her part. She was actually buying the van as a favor to her elderly parents. She’d encouraged them to take out financing for the vehicle and, believing they’d lucked upon a legitimate bargain, sent the money to an ostensibly secure online escrow account. This technique is common in legitimate car-buying to act as an impartial middleman — an agency holds the money securely until the vehicle is shipped to its new owner. This particular escrow site, however, was actually a bank account controlled by the cons. As soon as the funds hit the account, the money was withdrawn and the account vanished, along with any sort of paper trail. The name of the “secure” escrow account?

According to the Pew Internet Project, 78 percent of Americans find online shopping convenient and 66 percent have purchased something online at least once. This makes for a vast target audience for thieves.

Shopping online is convenient, and it generally is safe. Just make sure to follow precautionary measures and your common sense. Use the “smell test” when evaluating whether to send money or credit card information over the Internet. Never, under any circumstances, give your exact birthdate or social security number out. Use a credit card as opposed to a debit card-in the case of debit, the money is gone almost immediately with little hope of recovery in the event of fraud; in the case of a credit card, you may be able to dispute the charges down the road should that become necessary.

If you feel you have been a victim of Internet fraud such as on online car scam, or if you have a hinky feeling about a particular site, you can report that to the Internet Crime Complaint Center, a collaborative online complaint repository between the FBI and the National White Collar Crime Center.

Additionally, check out companies with your local Better Business Bureau. Know that fake online sites will often display an imitation BBB badge-check with the Bureau itself to ensure that company or site is actually a member. Not only that, fake sites have been known to use VeriSign Secure and even Internet Fraud Complaint Center imitation badges as well. Always double check with the entity itself!

Most online vendors, such as eBay Motors, have information and warnings about particular scams, plus general car-buying scheme details as well. Do your homework. The cost of a vehicle is a large investment, and while most online car-buying sites are legitimate, that high dollar value is an irresistible temptation to thieves.

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This entry was posted on Wednesday, August 11th, 2010 at 2:29 am and is filed under Auto Loan. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.