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Tips For Avoiding Fraud When Buying Or Selling A Car Online

Buying or selling a car today has found the Internet a more useful a tool than the different paper publications of yesterday. As a buyer, you can find a classic vehicle from an area that may have chance to be in better condition than the local choices, a custom one-of-a-kind street rod or locate that rare muscle car that only the lucky few can ever dream of owning. For a seller, you have a chance at a buyer that may be across the street or even the world to find your car and purchase it from you. What was originally designed as a tool for people to communicate and share ideas across the world, has become a wonderful tool for the classic car enthusiasts around the world.

Unfortunately, no matter where we turn today someone is waiting to take advantage of honest people just going about the routine business of buying or selling their vehicles. Some of the scams being perpetrating are nothing new, just the technology of the internet has allowed easier communication and new angles for these criminals. The criminals that perpetrate these crimes are typically from countries that have no laws against them and perhaps are even supported by their governments so stopping them is pretty difficult. We do have one weapon against these criminals, EDUCATION! I have put together a list of the most common scams you will find, if you are cautious you should be able to avoid them.

Fraud Prevention Tips for Car Buyers

Fraudulent "For Sale" ads in order to steal a deposit from unsuspecting buyers. Here are some things to watch out for:

Very low priced vehicle - if the seller's asking price seems to good to be true, it probably is. Many of these ads for late model cars include a VIN or Car Fax certification, I've even seen scans of other types of authentication docs for classic cars in these listings. Oh yeah, they like to include shipping in many of those ads too as an extra incentive. Scammers like to use personal circumstances, usually something like a death in the family or some other urgent business as an explanation for the low price on their ad. I've even seen them post that they bought a new car and don't "need" this one anymore. More recently I've seen where they are posing as soldiers having to leave right away on deployment as the reason for the low price. I especially despise anyone that would pose as a soldier while trying to scam someone. It's nice to dream about getting a $50K car for $10K but the reality is that you will get scammed if you take the bait.

Out of the country - be very cautious if the seller claims to be in another country. They have a full range of stories as to how they came to own the car but the reality is they don't have any car at all.

Wrong phone number - scammers prefer to communicate by email only, and often provide an incorrect phone number in their ad hoping you won't call but it makes them look more legitimate. If the wrong phone number is posted and the seller won't provide a working number, avoid the deal.

Request for your personal information - inappropriate requests for your personal or financial information are definitely a warning sign, especially when requested early in the process.

Phony Escrow companies - take extreme caution here. Scammers can easily create websites that look like legitimate escrow companies but are really just get your money. There is no such thing as eBay Escrow or Craigslist Escrow as they sometimes use in these scams. Using a third party facilitator for long distance transactions is a good practice, there are listings for legitimate companies found in a web search.

Western Union wire transfers - scammers will often request a deposit by Western Union wire transfer because it's fast, they don't need ID and they can receive it just about anywhere. Once they have your money, it's gone! Avoid anyone that requests a Western Union money transfer.

Fraud Prevention Tips for Car Sellers

Sellers must also take precautions to avoid scams. Here are some things to watch out for:

Buyer requests an inspection - one scam involves a potential buyer requesting that the seller pay for a mechanical/technical inspection of the vehicle prior to purchase. The buyer then suggests a particular inspection company they prefer to use. After payment is sent, the buyer and inspection company are never heard from again. If you are contacted by anyone making this claim and they request an inspection of your vehicle at your expense, tell them you are not interested and hang up immediately. NEVER pay for an inspection of your vehicle at a buyer's request. If an inspection is requested, the buyer should pay for it.

Out of the country - be extremely cautious if the buyer claims to be in another country. In this scenario they will usually tell you they are on a business trip or vacation and they have someone that owes them money in the US and will have that cashiers check sent to you instead. See Cashiers Check scam below. There are many legitimate foreign buyers, just watch out if any of they start to use one or more of the scams listed on this page. A real buyer from outside this country is willing to show you he is a legitimate buyer and will often times call you.

Buyer has an "Agent" - Buyer Has an "Agent" - scammers may claim to have an "agent" or "shipping agent" who is to arrange for the transport of the item, which usually ties into the next warning....

Buyer is representing a client - this is another set up for a potential scam, similar to the "agent" scam listed above, but in this case the scammer is claiming to be the agent for a buyer.

Cashier's Checks - avoid accepting payment by cashier's check. The scam involving an "Agent" will use a fraudulent Cashiers Check. Your bank may accept the deposit, most banks will ask you if you know who gave you the check and may call the issuing bank on the check to verify it for you prior to depositing. If they deposit it for you, it WILL take as long 30 days to find out if the check even clears. When it fails to clear the buyer will be long gone with your car, or if you had sent money to the buyer's "agent" as in the next warning, you'll be out for whatever amount you sent. Warning! Another thing to know is if you deposit a fraudulent Cashiers Check, even unknowingly, you can be arrested for fraud and could spend thousands of dollars on a legal defense to prove your innocence.

Buyer sends extra funds - do not accept payment for MORE than the selling price of the item. The scammer will request that you forward the extra amount to their "agent" after depositing a cashier's check in your bank account. Of course, you're really just sending money back to the scammer. THIS IS A VERY OFTEN USED SCAM.

Request for your personal information - as mentioned in the above tips for buyers, early requests for your personal or banking information should arouse suspicion.

Phony Escrow companies - also mentioned in the buyer's tips above. We do recommend using a legal third party facilitator for long distance transactions, but only use those that you already know and trust.

Emails only - be very skeptical of anyone who will ONLY communicate by email. Scammers tend to avoid telephone conversations at all costs, one major reason is they can't speak English well. They also tend to use free email accounts from providers like Yahoo, Hotmail, Gmail, and others because they are virtually untraceable.

TTY / TDD assisted calls - unfortunately there are a few scammers now using a service that is for hearing or speech impaired persons to scam you. They type and a relay operator then communicates to you for them, the main reason for this is to hide the fact that they are from a foreign country and don't speak English well.

Something else to watch out for - not car related but emails that appear to be from companies that you do business with, like eBay, PayPal, your bank or any other online accounts that you may have. The easiest way to identify them is the fact that they always refer to you as account holder (they don't know your name) and they always have a link for you to click on and verify your account information. These are NOT from who they appear to be from and clicking on those links will take you to a spoofed website (designed to look real) in order to gain access to your account to either take money from you or use your account for fraudulent purposes. The Internet is a great tool and if you remain aware of the scams being used it can be a safe place for you and your hobby.

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