The National Consumers League, a Washington, D.C.-based nonprofit watchdog, says its Fraud Center has reported an increase in complaints about used car scams, and cautions consumers not to fall victim to fraudsters during the upcoming peak car-buying season."Scam artists prey on consumers in search of a bargain, and these scams are no exception," John Breyault, Director of the Fraud Center, said in a statement. "Unfortunately, the only person that's getting a steal are the con artists themselves."
The NCL's Fraud Center has been tracking scams and issuing alerts about consumer fraud since 1992. Since January 2011, Fraud Center has received more than 100 complaints from consumers nationwide about used-car ripoffs, with reported losses totaling more than $290,000.
Most used car scams reported to the Fraud Center involve online classified listings on popular sales and auction sites including craigslist, eBay or Yahoo! Autos. These questionable listings often involve late-model luxury brands priced far below their regular market value.
When consumers contact shady sellers, the con artists tell them they aren't local and tell victims payment for the car (which often involves "shipment") must be sent via wire transfer. This in itself is a huge red flag, and as Consumer Ally has repeatedly warned readers, never, ever wire money to someone you don't know.
Used car con artists often pretend to be a members of the armed services as well, and claim they're either deployed or preparing to ship out. This time-tested lie helps build trust, tugs on patriotic heartstrings, and allows fraudsters to insist on swift payment.
"Scam artists are imaginative, and they have tricks aplenty to get a victim to trust them," said Breyault. "However, consumers can protect themselves by recognizing the most common red flags involved in these scams and never, ever rush to buy."
The NCL says consumers can avoid used car scams by being on the lookout for the following red flags:
- The seller asks for payment via wire transfer or bank transfer.
- The car is offered at a price well below common market value (such as Kelley Blue Book value).
- The seller demands urgent payment, since they are or will soon be relocating overseas.
- The seller says that they are located overseas, but have an American middleman or online escrow service that will hold the money until the vehicle is delivered.
- The seller refuses to meet in person or communicate over the phone.
- The seller's email or instant messages contain multiple grammatical or spelling errors.
- The seller claims the transaction is insured by a "protection program" associated with a real site (such as eBay, Google Checkout, PayPal, etc.) or another online payment system.