Selling your car? Watch out for these potential scams

Be deeply suspicious of every buyer, trust your intuition and proceed carefully

The time has finally come to replace your car with something new. But your old car still has value, and the dealer didn’t offer much on trade-in, so you’ve decided to sell it yourself. Or maybe you’ve got a beautiful old car that needs to find the right home and have chosen to list it online with a free classified listing service. How hard can this be?

Listing the car is easy. What’s hard is avoiding clever scammers who will try any number of tactics to dupe you not only out of some money or personal information, but quite possibly your precious wheels as well.

Roughly three million used cars are bought and sold by Canadians each year, according to Des-Rosiers Automotive Consultants, with about a third or more trading hands privately via online classified sites such as Kijiji, Auto-Trader or Craigslist.

That’s a huge market with a lot of potential targets for scammers. If there’s one thing to learn, it is this: Be deeply suspicious of every buyer, just as they should be suspicious of you. Trust your intuition and proceed carefully.

Here are some of the most popular scams to watch for:

THE PAYPAL PILFERER

These scams almost always follow the same theme: You’ve listed your car for $10,000 and get an immediate response via text or email. (That in itself is suspicious.) Still, you’re a trusting sort. The buyer might ask a few questions about its condition to earn some trust, or will go straight to the notion of buying your car sight unseen because he or she is working offshore as an oil rig worker or oceanographer, or is from another country, or is buying for their father in another province, or some other curious scenario.

The buyer offers to pay full price and will even include an extra $1,000 or so to cover shipping and fees, but needs you to set up, or send, your PayPal account so she can transfer the funds to you right away. Sounds good so far, easy sale! You send the buyer your PayPal email. Soon, an email arrives saying $11,000 is pending for your PayPal account, money that will be released upon payment to the shipping company.

Naturally, you want to send the $1,000 to get your $10,000 released and get the sale moving. But the PayPal email is fake, cleverly disguised to look like it is legitimate.

And this is where the fraud occurs: Once you send off the $1,000 via Western Union or PayPal or whatever, you never see the $10,000 promised you. At least you still have your car. Lesson: Always deal face-to-face or over the phone with potential buyers. Insist the buyer see the car before he or she buys it. For rare or specialty cars, this isn’t always possible, and your unique car will likely draw interested buyers from abroad, but you can still talk to them. Always be suspicious of someone more interested in the payment process than the car itself. Always deal in cash, but if you have to accept a certified bank draft, never release the car until the money owed you is confirmed in your account.

I’VE GOT A BUYER FOR YOU

There are two main variations on this scam. The first comes a few days after you’ve listed your car, and you get a call from the listing site saying your car is getting lots of traffic from interested buyers. Soon after, the site calls again with a “confirmed buyer.”

To secure this sale, all the seller needs to do is pay a $500 administration or finder’s fee. A 30-, 60or 90-day guarantee might also be offered, so if the sale doesn’t go through, the seller gets his fee back. Wow, sounds great! The seller then sends a legitimate cheque or is sent to a web page to make a credit card payment where the transaction is made. Only later, when no one calls about the car, does the seller get suspicious about the sale and the scheme is discovered. Some credit card companies will refuse a refund because the seller “authorized” the payment.

The second variation on this one involves “resellers” who falsely claim they will put the seller in touch with a real buyer — in exchange for few hundred dollars, though no such buyer exists. This one can be convincing because the scammers claim the seller undervalued the vehicle, and the buyer was willing to pay a little more to cover the reseller’s fee. Again, “refund insurance” is offered to make the deal sound risk-free, when in fact dealing with third parties is almost always a bad idea involving a higher risk. Lesson: Always research what your car is worth. Avoid agents or those acting “on behalf” of a buyer. Be suspicious; always ask the buyer to telephone you directly. Know that Kijiji, Craigslist, eBay, PayPal, etc., will not guarantee your transaction.

A CERTIFIABLE SCAM

Adopting a modern take on the forged cheque, bogus buyers are using “certified bank cheques” that look exactly like those from the bank, and offering a slightly higher amount than the asking price to make the deal more tempting. Normally, a certified cheque means the bank has verified and stamped the cheque, ensuring that sufficient funds exist in the buyer’s account to cover the amount of the transaction, thus giving the seller some assurance.

But thieves have become very good at duplicating such cheques. The seller then deposits the cheque and signs over the car’s title or ships the car with the papers. Sometimes, even bank tellers get duped — by the time the bank discovers the cheque is fake, the car is long gone. Worse, depending on your insurance, if the car has an outstanding loan, the seller could be on the hook for making payments on a car that’s no longer in their possession. Lesson: If a buyer offers a certified cheque, go to the bank with the buyer and explain that you need to confirm the cheque is legitimate, or ensure the bank makes the full transfer of funds. This in and of itself is still not bulletproof, but it’s better than taking a cheque at face value.