BBB Study: Virtual Vehicle Vendor and Escrow Scams
Used car sales – and scams involving vehicles – have surged during the pandemic. Buyers shop for a used car online and ask to see it in person, but the seller uses COVID-19 as an excuse to avoid meeting. The buyer sends the money to purchase the car, but it never arrives.
Scammers will use photos and descriptions from other advertisements to sell a vehicle that doesn’t exist. Once a buyer decides they want the car, they are asked to wire money to a third-party escrow business, which is actually operated by the scammer.
A September 2020 BBB study on virtual vehicle vendor scams revealed consumers age 55 – 64 were the largest demographic reporting this type of fraud to Scam Tracker. Of those reporting escrow scams, 41% reported losing money, and the study projects more than $1 million will be lost in 2020.
How can you recognize a scam like this? Red flags include prices far below market value, refusing to meet in person and claiming emotional or urgent reasons for the vehicle needing to be sold quickly. Fraudulent sellers insist it is safe to send them money, and the transaction is protected by an independent third-party shipping company. Scammers often use ebay’s name to seem more legitimate. They may even use fake invoices with ebay Motors letterhead.
If you’re looking to purchase a car online, use these tips from your Better Business Bureau to avoid escrow scams:
Do your research. Reverse engine search images of the car or look up any unusual phrases in the description. You can also use Who.is to learn how long escrow or shipping company websites have been active. Comparing it to how long the company claims to have been operating can help you determine the website’s validity.
Shop smart. As you consider different cars, check their Kelley Blue Book value so you can recognize prices that are suspiciously low. When you are ready to buy, refrain from paying over wire transfer or prepaid gift cards. Pay with a credit card, which can protect you if you need to dispute a charge.
Get a vehicle history report. You can request a vehicle history report from Carfax or Autocheck. Vehicle history reports show not only its accident and service history, but ownership history as well. This can help verify the car you are purchasing is legitimate.
Visit Bbb.org to read the full study.