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. But be warned, it makes for an attractive con 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 toward the purchase of the vehicle had vanished, along with any hopes of receiving their vehicle.
Here’s how this scam worked: con artists regularly troll sites such as this one which ran on Yahoo, and 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 types of scams work out of Eastern Bloc or African countries such as Nigeria, the infamous home of the “Nigerian fraud” scam . These thieves operate free of a guilty conscience.
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 wealth 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 escrow account. This technique is common in car-buying as an ostensible impartial middleman — an agency that 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? Safe-purchases.com.
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; 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’ve 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 [add link to that article], 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 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 the Internet Fraud Complaint Center imitation badges as well. Always double check with the entity itself!
Finally, 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.
Legitimate escrow companies won’t use person-to-person money transfers like Western Union or MoneyGram, nor will they have you send payment to an individual. And steer clear of “escrow” company websites with domain names ending in .org, .biz, .cc, .info or .US. In California, the Department of Corporations licenses just ONE online escrow site– www.escrow.com. Check your state for similar policies.
Additional sources and resources:
By, Identity Theft Secrets, guest writer, Sami K. Hartsfield, ACP, who is a paralegal in Houston with experience in commercial litigation and tax law. She holds a degree in paralegal studies and a Bachelor of Science degree in political science. After interning with Texas’ 14th Court of Appeals under Chief Justice Adele Hedges and completing the University of Houston Law Center’s Summer 2008 Prelaw Institute, she is preparing to enter law school this fall. Sami holds a national advanced paralegal certification, and four specialty certifications: Discovery; Trial Practice; Contracts Management; and Social Security Disability Law. More helpful tax information can be found at her National Tax Law Examiner page.