Criminals Hijack Online Car Ads To Trick Consumers

Shopping for cars is fraught with pitfalls without the potential of getting hooked by a scammer.

Online classified ad sites are the source of an emerging scam - where the fraudster takes an existing ad and substitutes his or her own contact information. When a consumer contacts the scammer, they are asked to move the transaction to another site, where the scammer attempts to get money from the victim. If the victim bites, they lose any money they send the scammer plus they never get the car.

The St. Louis BBB got  48,006 inquiries about used car dealers last year, making it the third largest industry for inquiries. We also processed 896 complaints about used car dealers.

Today's BBB release lists red flags that can be a tipoff that a used car seller is operating a scam:

St. Louis, Mo., June 28, 2012 – If you are cruising the online vehicle ads for a new ride, the Better Business Bureau (BBB) warns consumers to be alert to criminals that hijack online ads to “sell” vehicles they do not own and have no intention of delivering.

The Federal Bureau of Investigation’s Crime Complaint Center (IC3) received nearly 14,000 complaints from consumers who had been victimized or targeted by these scams from 2008 through last year. Victims lost nearly $44.5 million.

The scam varies, but what often happens is that consumers find vehicles they like
advertised on a legitimate website, often at a below-market price. When the
buyer contacts the seller, usually from an email address in the ad, the seller
responds with a hard-luck story about why they’re selling the vehicle at such a
low price.

The seller then asks the buyer to move the transaction to another website, often
citing security reasons, and offers a buyer protection plan in the name of a
well-known entity, usually a large online company.  The buyer receives an invoice and is instructed to wire the funds to an account. In some cases, sellers have posed as company representatives in a live chat, offering to answer questions from buyers.

Buyers are asked to fax a receipt to show that the funds have been wired, and the
seller and buyer agree on where and when the vehicle will be delivered. Of course, once the money is wired, there is no vehicle and the buyer’s money is gone.

“The instructions to wire the money should alert buyers that the deal is a scam, if
they haven’t figured that out when the seller refuses to make the car available
for the buyer to inspect,” said Michelle L. Corey, BBB president and CEO.

In most cases, according to the FBI, the ad that a consumer sees online is either
phony or was hijacked from another website. When the seller asks buyers to
switch to a second site, it is usually a spoof of a legitimate site where the
scammer can conduct a criminal business. Any “buyer protection plan” is bogus.

The scam has a number of red flags that should alert consumers:

• The price is too good to be true.
• The transaction is moved to another website.
• The seller says the “buyer protection plan” will cover the transaction even though the sale has been moved to another site.
• The seller won’t let the buyer inspect the car before purchase.
• The seller claims to be unable to show the car because they’re in the military and are about to be deployed, because they’re moving, because the owner died or because of some other reason.
• The money has to be wired to the seller.

The BBB offers the following tips for consumers interested in buying vehicles online:

• Buy from an established business with a good reputation. Check out the company’s BBB Business Review at www.bbb.org or by calling 314-645-3300.
• If you are unfamiliar with the business, find out if it has offices at the
  advertised address.  If you are unable to contact the company, contact the building manager or other tenants to confirm the business address.
• If possible, pay by credit card in case you need to challenge the purchase.
• Be wary of prices that seem unusually low. Low prices are the best way for a
  fraudulent business to attract victims.

For more advice on fighting fraud and managing personal finances, visit www.bbb.org or call 314-645-3300.

About the BBB

The BBB is a nonprofit, business-supported organization that sets and upholds high standards for fair and honest business behavior.  The BBB provides objective advice, free BBB Business Reviews on more than 4 million companies, 11,000 charity reviews, dispute resolution services, alerts and educational information on topics affecting marketplace trust.  Please visit www.bbb.org for more information.