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Beware Online Car Sales Scams

February 1, 2010 – 7:03 pm 2 Comments

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The old cliché that the internet is full of scams is in some ways still accurate today.  As in any situation where you are asked to part with your money, when shopping online you should always make sure that the person you are doing with – virtual or otherwise – is on the up and up.

Purchasing big ticket items online has opened the door to scammers looking to prey on buyers who are eager to jump on what they perceive as amazing deals.  This has become common on the web when it comes to car sales, with sites like Craigslist peppered with ads for desirable vehicles at too-good-to-be-true prices.  Even eBay, which used to be fairly good at rooting out illegitimate vehicle auctions has increasingly fallen behind when it comes to removing listings which are clearly bogus.

The vast majority of the time, when something seems too good to be true, it is.  I’ve managed to keep this attitude about me during my recent online car search, which has seen me tracking down a specific and somewhat rare model over the internet for a couple of months now.  An experience that I had just last week prompted me to write this post in order to remind others of a few indicators to look for when ferreting out suspect internet ads and auctions.

I had found the car I was looking for on eBay, for a price that was perhaps $2,000 to $3,000 less than the low end of the market.  Actually, the pricing was somewhat more complicated than that – the no-reserve auction had a starting bid of $200, but the item description specified a ‘buy it now’ price of $12,999.  It also specified that in order to be able to bid on this auction, buyers would have to contact the seller via an email address, outside of eBay.

This type of item description should right away set off alarm bells regarding its authenticity.  First of all, if an item doesn’t have a ‘buy it now’ option but lists a ‘buy it now’ price, the seller is most likely attempting to get you to deal with them outside of eBay’s buyer protection system.  Not only that, but requiring pre-approval to bid on an auction should only occur on high end items, not sub-$20k used cars.  In any case, all electronic communications with a buyer should be initiated through eBay, particularly something as nebulous as being approved to bid.  A quick look at the seller’s feedback didn’t tell me much, other than the fact that he or she only occasionally used the site and didn’t seem to have sold any vehicles through eBay in the past.

With my scam radar tingling, I began to take a look at a few of the other odd items involved in the auction description.  First, the vehicle was listed as being in Wisconsin, but the seller’s email address bore a .ca TLD – indicating that they were not a Wisconsin resident.  Since parts of that state are close enough to the Canadian border that someone may have moved from one side to the other in recent history, I decided to write this off to general paranoia.  However, looking closely at the vehicle’s history report, which was provided by eBay, revealed that the car was titled in Texas – not Wisconsin.  In fact, an examination of the photos of the car found in the listing showed a distinctly desert-like environment, with no grass but plenty of crushed stone landscaping and desert plant life.  Definitely not the type of background one expects to see in auction photos taken in Wisconsin in January.

By now I should have realized that once again, something too-good-to-be-true was exactly that.  I still attempted to contact the seller, both by email and through eBay to see what would happen.  I made sure to ask specific questions about the vehicle that the seller would easily have the answers to in order to ensure a more personalized response.  After three days of waiting and a second message through eBay, I got back the same poorly typed, form-style answer regarding some sob story about having too many cars and needing to sell one in order to raise money for some particular reason.  A verbatim copy of this message was sent to me four times.

At that point, I forwarded the emails I had received to eBay’s fraud department – harder to do now that it has shut down its Safe Harbor system – and forgot about the whole thing.  A few days after that, I received a message from eBay telling me that the seller’s account had been compromised, and that the auction had been fraudulent.

My search for a new car continues.  If anyone else out there is scouring the web for a great deal on a vehicle, please make sure that you stay wary and keep your wits about you.  Often times, the more appealing a deal is, the less legitimate it is likely to be.

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2 Comments »

  • Ulf Wolf says:

    Perhaps I can add to this that the best way to guard against being ripped off by online sales or auctions is to use a bona fide online escrow company. Although it does add some cost, that will take uncertainty out of the transaction.

    For my money, the best bona fide online escrow (and there seems to be ten fraudulent escrow sites for every bona fide one) is probably Escrow.com (http://escrow.com). In fact, it’s the only one that eBay recommends.

    Take care,

    Ulf Wolf

  • Benjamin Hunting says:

    Ulf – very good point. I had become so used to using PayPal that I hadn’t thought of escrow options in a long time. Obviously, PayPal isn’t practical for big ticket items like cars.

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