Phony web sites hijacking car dealers' business, buyers' down payments

Phony web sites claiming to be those of real car dealers have scammed buyers out of down payments and cars in at least seven states.

Both dealer and buyer are victims in the scam, which has in some circumstances produced more than a thousand calls from angry consumers to bewildered dealerships, sometimes after money is wired across country. Prospective buyers -- and dealers -- find out there's a rip-off when buyers try to make arrangements to pick up the car, usually advertised as repossessed.

The Better Business Bureau has received complaints from dealerships in Colorado, Florida, Georgia, Michigan, New Mexico and Texas. Most recently, said national BBB spokeswoman Alison Southwick, the Memphis, Tenn., BBB took a complaint about local dealership America Auto Sales.That was news to America Auto Sales, a family-owned operation with an A rating from the BBB. According to company official Roger Haney, America Auto does not sell repossessed cars and buyers have to show up in person.

"We started getting numerous phone calls from all over the country asking questions about vehicles that we didn't have," said Haney. One caller alerted him to the web site where he found the car. Haney discovered the bogus web site listing his company's name and real address, but a fake telephone number.

"It was a very nice looking web site that I would have liked to have, but not under these circumstances," said Haney. The site advertised bank repossessions from as early as 2004 to as recent as 2009. One customer said he tried to buy a 2009 Mustang with 1,900 miles for $2,000. Another man called from California and was prepared to make a wire transfer for a BMW for $24,000. Luckily he found the company's real phone number before making the purchase.

The scammers make individual websites based on information from legitimate dealerships. According to the BBB's Southwick, the web site could be up for a few days or weeks and then is taken down. In Haney's case, after notifying the BBB, the police and the web hosting company, the site was taken down and put back up a few times, but is now gone.

When making sales, the scammers usually communicate only by e-mail, or occasionally by phone on their own terms. Prospective buyers are told they need to wire a deposit, usually overseas, in order to buy a car. Southwick says some have sent as much as $5,000.

"Rather than wire it to the company, they're supposed to wire it to an individual and they're told it's to avoid taxes legally, which is just ridiculous on so many levels," says Southwick. After the money has been wired, they are told to contact the dealer directly.

To avoid this and other scams involving online purchases, Southwick suggests looking for the following red flags:
  • A price too good to be true.
  • A dealer that only wants to communicate by e-mail.
  • A requirement to wire money through Western Union or Money Gram.
Consumers should call the dealership directly to confirm the transaction. Southwick adds anyone who has been a victim of this scam should tell their local BBB and file a complaint to Internet Crime Complaint Center.

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