Re: Please Read good advice-scams to purchase car
Safe Selling Tips
Most automobile buyers know that scams are rampant, so they're diligent about not becoming a victim. But potential car sellers need to be careful of swindlers, too.
Con artists have always been out to get used-car sellers, whether it's with bogus checks, never-to-be-met payment plans or other fraudulent schemes. While the internet has made used-car selling a much more convenient proposition today than in the past, the web also has made such shell games, which target honest people who just want to sell their cars for a decent price, easier to pull off.
Car sellers, beware: Whether you're employing the internet to put your car on the market or going a more old-fashioned route, make sure you protect yourself from a potential rip-off.
Certified Check and Overpayment Scams
One of the newest and most popular stings perpetrated against individual car sellers is a certified check scam. According to the U.S. Secret Service, which enforces federal laws related to counterfeiting, certified check scams cost U.S. consumers $100 million a year.
Victims are usually selling a used car or some other valuable item over the internet, though sometimes the seller might receive a call or fax in response to a print ad as well. A buyer shows interest in buying the car and says a cashier's check will be issued for payment. At the last minute, the so-called buyer comes up with a reason to write the check for significantly more than the asking price and requests the seller to wire the difference. The checks are often such convincing fakes that the seller wires the money immediately after his or her bank clears the check. But in a week or so, the check turns out to be counterfeit, and the bank requires the car seller to cover the money for the phony check.
"The checks are of such good quality that they often fool bank personnel who study them," says Idaho Attorney General Lawrence Wasden. "Victims think the cashier's check or corporate check must be good when the bank gives them the money. But several days later they learn the check is a fake, and they're out both the item they sold and the full face value of the counterfeit check." In Idaho, even a deputy attorney general was duped by such a ploy.
The Federal Trade Commission offers the following tips to avoid similar scams:
Confirm the buyer's name, street address and telephone number.
Don't accept a check for more than the selling amount.
Consider alternative methods of payment such as an escrow or online payment service.
If you accept a check, insist on one drawn on a local bank or a bank with a local branch.
If the buyer insists that you wire back funds, end the transaction immediately.
If a buyer attempts to pay with a winning check from a foreign lottery, end the transaction immediately.
Resist pressure from the buyer to act immediately. An offer good today should be good after the check clears.
Bogus Escrow Services
When selling a car online, an escrow service can be a good idea. Escrow services collect and verify payment from a buyer, then notify you — the seller — so you can deliver the vehicle. If the buyer is satisfied with the car, the escrow service releases the purchase amount to you. If the buyer isn't satisfied, the buyer sends the vehicle back to you and keeps his money. It's a great way to ensure that both parties are satisfied with the transaction.
However, fraudulent escrow sites are popping up all over the internet. Escrow.com is a reputable service that charges users a percentage of the item's sales price — usually between 3 and 6 percent — but dozens of fake escrow services are drawing in consumers simply because they have "escrow" in their names. On one end, bogus used-car sellers can set up their own fake sites, bilking would-be car buyers out of tens of thousands of dollars — without ever sending a single vehicle. But used-car sellers can be fooled, too. The car's purchase price appears to be sitting in supposed "escrow," the seller sends off the car, and the buyer, the money and the car itself are never seen again.
On the flip side, you may be dealing with a genuine buyer. But if you employ the wrong escrow service, you'll never see the money once it's deposited, and the buyer will be out thousands of dollars.
The SOS4Auctions website can help car buyers avoid such shadowy sites with its database of nonreputable and legitimate escrow services. According to the site, as many as 20 fake escrow sites are up and running on any given day. The National Consumers League also offers tips on using escrow services online.
Auction Site Issues
Auction sites like eBay, have become popular venues for selling used automobiles. But just because you're selling via a well-known auctioneer doesn't mean you're free and clear of potential trouble. According to the Federal Trade Commission, fraudulent schemes conducted via online auction sites are the most frequently reported form of internet fraud, and they're often associated with high-value items like automobiles. It is your responsibility as the seller to do due diligence before trading any vehicle for payment online.
Both fraudulent check and fake escrow site scams can occur after online bidding is complete. As with all internet auctions, you should carefully research the potential buyer to make sure he has a positive buying history. Never ship your vehicle or transfer the title until all money is in your hands. And if the purchaser uses a certified check, follow the precautions above to make sure it clears the issuing bank.
Many auction sites offer instructions on how to avoid being scammed. They also explain the few options you have, along with steps and a timeline for taking them, after you've been defrauded.
Other Tips on Protecting Yourself
New scams pop up from time to time. Be firm about accepting only cash or a cashier's or certified check, and follow the rules above when dealing with checks. Don't fall for anyone who offers to pay you off over a period of time.
As added protection, record every step of the purchase or sale. Print out the details of every transaction, including the original product description and any online bidding history or a history of negotiations with the buyer.
Write a receipt for both yourself and the buyer. Include all pertinent information like the names, addresses and phone numbers of both parties, the vehicle identification number, selling price, make, model and year. Include a statement that the car is being sold as is. Finally, take pictures of the car before you ship it or transfer ownership.
Lastly, if an offer sounds to good to be true, it probably is. If a proposed payment plan makes no sense (why would someone in Nigeria trust you with a huge cashier's check anyway?), then steer clear.
If You've Been Taken . . .
If you're the victim of an auto-buying-related scam and you have no luck trying to settle the dispute with the supposed buyer, it's critical to contact the appropriate authorities immediately. File a report with your local police department, and contact the consumer protection division of your state attorney general's office; you can find a listing of all 50 offices online at the National Association of Attorneys General.
At the national level, contact the Federal Trade Commission's Bureau of Consumer Protection, the U.S. Department of Justice's Internet Fraud Division, Consumer Sentinel, the FBI's Internet Fraud Complaint Center or the National Fraud Information Center. If the scam was carried out via U.S. mail, you can also fill out the U.S. Postal Service's Mail Fraud Complaint Form.
These websites are good sources to check out before you sell your vehicle, and they maintain current updates of the latest scams perpetrated against consumers.
You can email complaints about the counterfeit check scam to the U.S. Secret Service at
419.fcd@usss.treas.gov or contact your local Secret Service field office.
Finally, if your situation involved a supposed buyer overseas, then you should contact the appropriate authorities in that country as well. European victims of fraudulent car buying should get in touch with the European Anti-Fraud Office.
By Michelle Krebs, cars.com; Last updated on 12/29/04
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