SCAMS BULETIN Host is Jay White an inactive attorney in San Mateo County, California.

November 13, 2020

CAR BUYING SCAMS

Car buying is a gamble. If you buy a used one, you’re betting that it won’t quickly let you down. If you buy a new one, you don’t know if you bought a lemon or if you overpaid. A lot of crooks are ready to scam both car buyers and sellers.

A scam can be disarmingly simple. For example, in a recent New York incident, a fake buyer and a would-be seller met up and took a vehicle for a spin. Partway through the drive, the pair stopped and got out to inspect the vehicle, leaving the engine running. Then the scammer jumped back in and drove away, injuring the owner as he tried to stop the theft.

There have been incidents in which a phony buyer out on a test drive with an owner has pulled a gun and ordered the owner out — basically a gunpoint hijacking.

Another common fake buyer trick is a version of an advance payment scam in which the seller receives a dud check for the car being sold.  Extra dollars may be added to be forwarded to a third party to pay for phony shipping and insurance. In this case, the scammer is relying on the victim to wire this additional sum back to them before the fake check is identified.

Scammers target buyers by luring them into paying for autos they never receive, receiving flood-damaged vehicles, having a rolled back odometer or disguised vehicle title.

Escrow scam

A recent report has identified a surge in car-purchase and escrow scams. This scam is used to persuade a buyer to deposit money with a supposed escrow company that will hold the cash until the buyer receives the car and then pass the payment to the seller.

The problem is that the escrow company doesn’t exist, or at least it’s a fake operation set up by the scammer. So, when the victim sends the money, it goes straight into the scammer’s pocket.

The situation is worsening as more people opt to buy online. Scammers are also using self-isolation or lockdowns as an excuse for refusing to meet the potential buyer. Instead, they convince the victim that using an escrow will ensure the seller gets paid and the buyer is happy.

Warning Signs

Common warning signs of this con trick include extremely low prices; claims of a family death, divorce or military deployment forcing an urgent sale; excuses so the “seller” avoids meeting the would-be buyer or letting them see the vehicle; claims that the deal is secure because of escrow or some type of (non-existent) guarantee from the likes of eBay, Craigslist, Facebook Marketplace or even Amazon.

Even if you can’t easily see the vehicle, you can pay a legal car inspection service to view and report on it.  You can insist you have an opportunity to personally inspect the title.

If you want to use an escrow service, insist that you be allowed to make the company choice.

The most effective way to avoid nearly all of these tricksters is to deal only with someone you can meet face-to-face and who has a vehicle and a title you can inspect. No matter what the story or how tempting the prices, never buy from an individual sight unseen.

You can learn more about fraudulent escrow sites here: https://tinyurl.com/escrow-fraud and read the full BBB report, which includes examples of the car buying con tricks, here: https://tinyurl.com/BBB-cars

ATTRIBUTON:  scambusters.org