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BBB study: Scam opportunities growing as more people head online to purchase vehicles

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Fri, Sep 25th 2020 03:10 pm

By the Better Business Bureau

Social distancing guidelines during the pandemic fueled a shift to online shopping for consumer goods of all kinds, including vehicles, with particularly high demand for recreational vehicles (RVs). Many online platforms list cars, trucks, vans and RVs for very low prices, with sellers offering to make third-party delivery arrangements if the buyer pays via an escrow account. In reality, neither the automobile nor the escrow company exists – leaving the buyer without their money or a vehicle.

An in-depth investigative study by Better Business Bureau (BBB) finds that thousands of consumers have fallen victim to this scam, with losses totaling millions of dollars. The study –Virtual Vehicle Vendor Scams: BBB Study Reveals a Growing Scam Using Fake Cars and Escrow Companies to Steal from Unwitting Consumers” – points to heightened risk from this scam as demand increases for online vehicle purchases. Read the full study here.

According to the study, websites such as Craigslist are filled with advertisements for low-price vehicles, with sellers claiming that the reduced price is because of an upcoming military deployment overseas, a divorce, or the death of a family member. Victims are directed to pay a supposedly independent third party, typically by wire transfer, to hold money in escrow and ship the vehicle. However, no vehicle is ever delivered.

Available data suggest fake online vehicle sales are increasing, but the scope of this fraud can be difficult to gauge because many law enforcement agencies do not track it as a separate complaint category. The Internet Crime Complaint Center has reported receiving tens of thousands of vehicle escrow scam reports, with losses in the tens of millions. Criminal cases likewise reflect millions of dollars in losses. BBB receives hundreds of BBB Scam Tracker reports annually about fake vehicle shippers and escrow companies, with 41% of victims reporting they lost money.

BBB Tips to Avoid Online Vehicle Scams

Watch out for too good to be true deals. They are most likely a scam. Scammers often steal consumers’ personal information and money by offering them high-value goods at extremely discounted prices.

Never wire funds or complete bank-to-bank transactions. Scammers love this kind of transaction, because there is no way for you to get your money back once it is completed. Instead, make legitimate purchases by check or credit card.

Contact the seller by phone. At some point during your negotiations, speak with the seller on the phone. If they are unusually vague about certain details of the sale or cannot confirm their location or the vehicle location, it’s most likely a scam.

See the car first. If possible, make an in-person inspection and take a test drive first.

Don’t give in to pressure. Scammers often try to pressure you into giving up your personal information or making a down payment before you have time to think about the purchase. Take your time and think a deal over before agreeing to anything. If you get a bad feeling, listen to your gut.

Don’t trust a seller or buyer who says that the transaction is guaranteed by eBay, PayPal, Craigslist or another online marketplace. These sites explicitly explain they cannot guarantee that people using their services are legitimate. Anyone who says otherwise is lying (see reporting list below).

If you are the victim of a vehicle scam, file reports with the following:

•Better Business Bureau – file a complaint with BBB if you lost money or report a scam online to BBB Scam Tracker.

Federal Trade Commission (FTC) – file a complaint online at ftccomplaintassistant.gov or call 877-FTC-Help.

FBI Internet Crime Complaint Center (IC3) – file a complaint online at ic3.gov/complaint.

The platform where you saw a suspected bad ad such as:

√ Craigslistcraigslist.org/contact

Kijiji help.kijiji.ca/helpdesk/safety/how-do-i-report-an-ad

√ Facebook Marketplacefacebook.com/help

√ eBay – Forward suspicious emails to [email protected]

BBB is a nonprofit, business-supported organization that sets and upholds high standards for fair and honest business behavior. BBB services to consumers are free. BBB provides objective advice, BBB Business Profiles on more than 5.3 million companies, 11,000 charity reviews, dispute resolution services, alerts, and educational information on topics affecting marketplace trust. Visit bbb.org for more information.

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