Why online car buying and selling scams are surging: Internet Scambusters #935
Online car buying is on the rise — and so are scams associated with them. This year looks like being a record one for complaints.
In this week’s issue, we focus on how crooks set up fake escrow companies to fool their victims and highlight the simple way to avoid the tricksters.
We also have a warning about 17 Android apps said to contain spyware.
Let’s get started…
Don’t Fall These Car Buying & Selling Scams
Car buying is a gamble. If you buy used, you’re betting that it won’t quickly let you down. If you buy new, you don’t know if you bought a lemon or if you overpaid.
But that’s just the start. There are also lots of people out there ready to scam both car buyers and sellers.
A scam can be disarmingly simple. For example, in a recent New York incident, a fake buyer and a would-be seller met up and took a vehicle for a spin. Partway through the drive, the pair stopped and got out to inspect the vehicle, leaving the engine running. Then the scammer jumped back in and drove away, injuring the owner as he tried to stop the theft.
There have also been incidents in which a phony buyer out on a test drive has pulled a gun and ordered the owners out — basically a gunpoint hijacking.
Another common fake buyer trick is a version of an advance payment scam in which the seller receives a dud check for the car they’re selling, with an extra couple of thousand dollars added on, supposedly to be forwarded to a third party to pay for shipping and insurance.
In this case, the scammer is relying on the victim to wire this additional sum back to them before the check is identified as a fake.
But by far the biggest proportion of scams target buyers, luring them into paying for autos they never receive, selling flood-damaged vehicles, rolling back the odometer or disguising the vehicle title — all of which we’ve warned about several times in the past.
Now, a new report has identified a huge surge in car-purchase escrow scams because of a big rise in online car buying.
The scam is used to persuade a buyer to deposit money with a supposed escrow company that will hold the cash until the buyer receives the car and then pass the payment to the seller.
The only problem is that the escrow company doesn’t exist, or at least it’s a fake operation set up by the scammer. So, when the victim sends the money, it goes straight into the scammer’s pocket.
The Internet Crime Complaint Center (IC3), which is fronted by the FBI and other official agencies, says it’s received thousands of fake car escrow complaints. And the Better Business Bureau (BBB), who conducted the investigation, says it gets similar numbers of similar reports every year. More than 40 percent of victims admit to paying up and losing money.
The situation is getting worse because of the current health crisis. Not only are more people opting to buy online, but scammers are also using self-isolation or lockdowns as an excuse for refusing to meet the potential buyer.
Instead, they convince the victim that using escrow will ensure the seller doesn’t get paid until the buyer is happy. It’s a simple and neat trick.
“Investigations suggest these scams are operated by Romanian organized crime gangs,” says BBB. “Criminal authorities in both the U.S. and Europe have arrested dozens of the scammers responsible for millions of dollars in losses, but this scam continues to operate.”
The organization suggests not only that complaints will reach an all-time high this year but that they probably only represent a fraction of the actual number of car buying escrow scams.
The most common warning signs of this con trick include extremely low prices; claims of a family death, divorce or military deployment forcing an urgent sale; excuses so the “seller” avoids meeting the would-be buyer or letting them see the vehicle; claims that the deal is secure because of escrow or some type of (non-existent) guarantee from the likes of eBay, Craigslist, Facebook Marketplace or even Amazon.
In some cases, scammers say they can’t speak to you but will leave messages via a voicemail service supposedly connected to one of the above big names.
The simple way to avoid nearly all of these tricksters is to only deal with someone you can meet face-to-face with a vehicle and title you can inspect. No matter what the story or how tempting the prices, never buy from an individual sight unseen.
Even if you can’t easily get to see the vehicle, you can pay a legal car inspection service to view and report on it, as well as to meet the owner and inspect the title. And if you want to use an escrow service, insist that you choose them rather than using the “seller’s” escrow — then do your research online.
You can learn more about fraudulent escrow sites here: How Does a Fraudulent Escrow Site Defraud Sellers? And you can read the full BBB report, which includes examples of the car buying con tricks, here: Virtual Vehicle Vendor Scams: BBB Study Reveals a Growing Scam Using Fake Cars and Escrow Companies to Steal From Unwitting Consumers.
Alert of the Week
Google has withdrawn 17 Android apps from its Play Store after finding links to a nasty piece of spyware called “The Joker.” The malware can steal texts, contact details, and other information.
Google has removed them from the store, but it’s up to you to ensure they’re not already on your device. See the list of offending apps here: Watch Out! If You Have These Applications, the ‘Joker’ Malware Is Stealing Your Data.
Time to conclude for today — have a great week!