Online Car Scams Shift Into High Gear (Part One)

The Internet has made car shopping easier than ever—with websites that provide shop-from-home pricing information and inventory listings. But hiding amid this online convenience are a growing number of scams that can put vehicle shoppers and sellers alike on the road to a rip-off.

In the first of two parts, Scam Alert explores the latest ploys in how consumers are bilked by private-party “buyers” and “sellers” of used vehicles. Next week we explore a surge in phony escrow companies that falsely promise to provide “security” in the online purchase of a car.

It’s a scam that’s been around for years and it works like this: Internet advertisements offer used cars for sale at great prices. After exchanging e-mails, the would-be buyer learns that the vehicle is in another town. And once the seller receives the money for its purchase, the car will be delivered.

But guess what happens: The money is wired but the car never arrives. That’s because it doesn’t exist—other than in the phony ad.

Even more insidious is an increasingly common deception that tugs at your heartstrings while attempting to empty your wallet: Scammers pose as soldiers who need to sell their cars quickly and cheaply, before their deployment to Iraq or Afghanistan.

The FBI issued a recent warning of this patriot “act,” after a particularly cruel scheme some months ago in which a scammer falsely posed as the father of a soldier killed in Iraq. He offered to sell an $80,000 book-value BMW for only $2,800. That online advertisement—published soon after local newspapers reported on the soldier’s death—included photos of the car, the fallen hero in uniform and this explanation for the huge discount: “This car will be my gift in the memory of my son. … Money are not a problem. All I want is to find the right person who’ll love and take care of this car in the same way he did.”

In reality, that solider never owned a car. And that bogus ad was discovered by the family of another soldier who was killed with him in battle. The scammer was never found.

Although most of those bilked are would-be buyers, it also happens to sellers. In February, a 61-year-old Madison, Wis., woman was tricked in trying to sell her van online. After placing an online classified, she was quickly contacted, via e-mail, by a “buyer” offering her $500. He sent her money orders totaling $3,000, instructing her to wire $2,500 to an accomplice in Chicago, who would then come to claim the van.

After depositing the money in her bank account and wiring the $2,500, she learned the money orders were counterfeit, says police spokesman Joel DeSpain.

So how can you protect yourself when using the Internet to shop for or sell a car?

Stay local. You’ll want to see that the vehicle actually exists—take a test drive and have a mechanic’s inspection before purchase to prevent other car-buying headaches. Websites such as Edmunds.com or Kelley Blue Book provide realistic pricing information by vehicle year, make and model—along with direct access to local inventory via AutoTrader.com, which you can search by ZIP code. Vehix, which also provides local searches by ZIP code, is another way to ensure a safer transaction. Most listings on AutoTrader.com and Vehix are vehicles available at local dealerships, where a personal inspection and test drive can be made. By comparison, those on Craigslist are primarily from individuals, which can be riskier.

Use the phone. Don’t rely only on e-mails when negotiating in cyberspace. Although there’s no guarantee a scammer will provide a legitimate phone number—they could use a disposable cellphone that’s difficult to trace—phone contact will help at least weed out the foreign scammers who often place these bogus online ads.