I love the idea of buying a used car over the Internet. I like that you can go onto many reputable websites, including eBay Motors, and browse a large selection of vehicles without having to step foot onto a lot. There's just one problem: Cyber criminals are targeting online auto shoppers. The good news is that scam artists are pretty easy to identify if you know what you're looking for.
So how do the scams typically work? According to the FBI, criminals try to sell a vehicle they don't own. They make the deal seem really attractive by pricing the car below book value. They then tell the potential buyer a sob story that they need to sell quickly since they are moving for work or getting shipped off to Afghanistan on a military deployment.
Due to the pending move, the criminal refuses to meet the buyer in person or allow him to inspect the vehicle. The potential victim is then instructed to wire money to a third party and fax the receipt to the seller as proof of payment. The car is never delivered.
I know what you're thinking. Of course this is a scam. Who would buy a car that you can't inspect in person? But it turns out that folks get duped quite a bit. Every hour an auto shopper loses $1,000 and every 90 minutes a consumer complaint is filed, according to the FBI.
The reason regular consumers are falling for this scam is because the criminals are quite sophisticated. They make their fraud appear legitimate by misusing the names of reputable companies and programs. The most common example is the use of eBay Motors' Vehicle Purchase Protection (VPP) program to secure the transaction.
Criminals are also using a live-chat feature that allows them to answer questions about the car and assure a buyer that the deal is safe.
So how can you protect yourself from this crime? Here are some tips from the FBI and eBay Motors:
1. Beware of any seller who wants to move a transaction from one website to another.
2. Watch out for sellers who try to use a vehicle protection program, such as eBay Motors', even though the transaction started on another website.
3. Be suspicious of sellers who try to rush the process and request payment via a wire transfer payment.
4. Question sellers who refuse to meet in person or let you physically inspect the car.
5. Beware of sellers who live in a different location than where the car is located.
6. Finally, keep in mind that any vehicle that's listed well below book value is a possible scam.
Despite this scam, I don't think buyers should avoid researching and purchasing a car online. Just remember that you need to be careful. Most importantly, try to personally meet the seller and see the car for yourself before you agree to buy it.
Stacey Bradford is the author of The Wall Street Journal Financial Guidebook for New Parents.
1951 Buick image courtesy of Flickr, CC 2.0>
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