Scams to Be Aware of When Selling or Buying a Car
If gold is hot, con artists play up gold. So now that we're seeing some record-high prices for used cars, why not a used car scam?
Used cars continue to be popular, thanks to sluggish new car sales during the Great Recession and the reduced production levels during the quick-fix auto bankruptcies in 2009. The recession cut into pocketbooks and boosted demand for used cars.
"Values are relatively strong right now," said Alec Gutierrez, manager of vehicle valuations for Kelley Blue Book.
A 3-year-old car today is generally getting about 10% to 12% more than a 3-year-old car last year, he said.
So the online scam market is getting hotter, too. Scammers are hijacking real car ads from legitimate Web sites and engaging in live chats to answer questions. It all looks good -- especially the price.
But be warned, once the money is wired, it's gone.
From 2008-10, the FBI's Internet Crime Complaint Center has received nearly 14,000 complaints from consumers who have been victimized, or at least targeted, by these online used car scams. The FBI reported that victims lost nearly $44.5 million.
Consumers are being warned to simply walk away if a seller on Craigslist or elsewhere "promises" some sort of guarantees elsewhere, such as an eBay protection program. The con artists claim outside connections with eBay Motors, Edmunds and Kelley Blue Book -- to give the impression that there's some sort of buyer protection program to cover an auto transaction that's conducted outside that company's site.
The buyer tells the seller to send money to an escrow agent. The promise is that the cash will be held until the vehicle is delivered.
Of course, the escrow agent is a phony -- and the scammers are long gone. And that pretty red Honda Civic in the ad? The scam artists never had the keys to hand over, anyway.
Watch out for red flags when offered a used car deal online
When you need reliable transportation, the last thing you need is an unreliable deal on a used car that's priced so low you cannot believe your eyes.
Did I mention that the seller needs cash fast while dealing with a miserable divorce? Or claims to be in the military and is about to be shipped overseas?
"Our goal is to have these offers ignored," said Jack Christin Jr., associate general counsel at eBay.
Some people have been scammed out of $1,500 -- or even $10,000 -- on bad used car deals that looked legitimate by using names like eBay Motors.
"It's extremely traumatic for victims to lose that kind of money when the car doesn't exist," Christin said.
It's upsetting to think that you could have been a victim, too.
A retired couple in Pennsylvania exchanged about three e-mails in September with a man who claimed to be a cargo pilot and desperate to sell his 2011 BMW as part of his divorce.
He was supposedly selling his BMW Z4 roadster with just 5,924 miles for $15,270.
Talk about a deal! A new BMW Z4 has a base price of $47,450.
All the couple had to do was send $2,700 to Kelley Blue Book to show that they were serious buyers.
Yes, the deal did sound way too good to be true.
But the couple said the Vehicle Identification Number provided matched the car, and the online pictures looked good.
Maybe, the couple thought, this so-called Richard Pasley did not need the money and wanted to cheat his ex-wife out of extra cash. Still, the retired couple played it safe.
"I said to my husband, 'We are not sending $2,700 until we call Kelley Blue Book," said Darlene, who did not want her last name used because of her dealings with the scammers.
After a few tries to find the real Kelley Blue Book -- not the link listed in e-mails from "Pasley" -- she found out the real Kelley Blue Book does not even take money to handle transactions.
Consumers should watch out for some red flags here:
• Pasley was so busy -- like many scammers -- that he could only send e-mails. "I'm away most of the time I will not be able to deal in person," he wrote.
• The super bargain price was advertised at one site, but the seller wanted to complete the deal on another.
The FBI said criminals are pretending to use the eBay Motors vehicle protection program -- which is a legitimate program -- as a way to make the car deal appear solid. The con artists falsely assert that their sales are protected by liability insurance coverage up to $50,000.
"These criminals have no association with these companies," the FBI said.
• The seller was in a super rush to get the money.
"I don't want to offend you, but the car is priced for a fast sale so please if you intend to apply for a loan or financing do not reply to this message!" the scammer wrote.
Christin said the scam sellers are always in a hurry and have some compelling story to make you think such a low price could be realistic.
• The only way the Pennsylvania couple could see the BMW in person was by sending money first. "You will deposit $2,700 to Kelley Blue Book and they will keep the money until you will receive and inspect the car. You will have a 5 days inspection period. If the car is not as described it will be shipped back on my expense and they will give you a full refund," the e-mail from the advertiser said.
Oh, sure. What's more likely is that you won't see any car -- and you'll never see your money again, either.
As part of the legitimate eBay program, used car buyers would not pay for a used car or truck via Western Union or MoneyGram, either.
Robyn Eagles, a spokeswoman for Kelley Blue Book, said scammers falsely using the Kelley Blue Book name have been active in the last 30 days. A lot of the e-mails and Web sites look legitimate.
How can anyone believe these guys?
Some scammers have added the new twist of online live chats in e-mails.
"It's a way to create a sense of credibility with the potential victim," Christin said.
But the huge red flag should be the price that tempts any buyer in the first place.
Like a BMW marked at more than 65% off a base price?
"I kept saying, 'How was this one so cheap?' " the Pennsylvania retiree said.
Repeatedly asking that question saved the couple $2,700.
Contact Susan Tompor: 313-222-8876 or firstname.lastname@example.org