BBB finds virtual vehicle sale scams are on the rise
The Better Business Bureau issued a study on virtual vehicle vendor scams in 2020, which revealed that reports to BBB Scam Tracker identified a growing scam using fake cars and escrow companies to steal from unsuspecting consumers. The study also noted that while legitimate sellers use modern technologies to simplify the carbuying process, fraudsters use similar technology to carry out elaborate impostor scams.
A more recent review of BBB Scam Tracker submissions finds that individuals continue to report bogus online listings for non-existing vehicles, with an increase in those targeting high-end buyers of rare classic cars. A new trend has also emerged — fake VIN report sites are being included in vehicle scams.
While fake auto sales listings and fake VIN report sites have been connected to several websites, many of these scams are being promoted on social media platforms as well. These sites and ads are designed with a focus on stealing both money and information from victims.
› How do online car buyers get scammed?
The fraud starts when a buyer looks for a vehicle online. They may find too-good-to-be-true listings on real sites like eBay and Craigslist, and as mentioned above, scammers have increased the use of social media sites, including Instagram. Fraudsters pose as private sellers or dealerships, using stolen pictures, fake addresses and elaborate stories to explain overly cheap prices.
Additionally, scammers may ask the buyer to use a fake escrow company to hold the money while the vehicle is supposedly shipped to the buyer for evaluation with an option to return the vehicle if they aren’t happy with it. In reality, the scammer controls the escrow company, so once the money is received, they disappear or give excuses for why the non-existent vehicle never arrives. Eventually, the fake escrow website also disappears.
These schemes use any type of vehicle — cars, boats, motorcycles, trailers, motorhomes and even yard/farm equipment — to lure buyers. Here’s an example that Melissa from Olympia, Washington shared with BBB about her experience last year:
Melissa responded to an ad on a legitimate vehicle sale website for a $15,500 Airstream trailer, a popular model in recent years. The seller said they were dealing with a health issue and needed to unload the camper to pay for unexpected bills.
“He said he was using a consignment business that he had used since 2017. I paid through the consignment business website, which looked official, and I could not find anything online saying that company was fraudulent. The trailer was supposed to be delivered to my house,” she told BBB.
As Melissa waited, the delivery date kept being pushed back.
One day, she was told the trailer was damaged on its way to being delivered and she would receive an insurance payment instead. Months later, there was still no money. “I was scammed, since I still have not received a refund,” she said.
BBB is finding the emergence of fake VIN report sites has become notably popular in these schemes. These mainly target car buyers, but even private car sellers seem to be a target of this scheme.
Buyers share that despite having a car history report from a reputable site, the “seller” often claims that vital information is missing from that site’s reports and pressures them into buying a report from another site. After they make the purchase on the recommended site, they receive unauthorized charges on their credit card.
Some private sellers report being contacted by a person claiming to be an interested buyer in their advertised car. The buyer asks the seller to purchase and provide a history report from a specific site before they’re willing to finalize their purchase.
Whether a car buyer or car seller, the person making the report purchase is at risk of having their personal and payment information compromised. The scheme can also extend to anyone who is in the market for a VIN history report, as shared by Susan in Massachusetts, who realized she had been duped in November while searching for vehicle information online.
Susan reported: “I wanted to look up a vehicle history, was promised no subscription. One report is $1. But they charged $29.95 right away.” The scam can continue through recurring charges or additional unauthorized charges. “There is another website listed on my credit card receipt, which looks like the same scam,” Susan told BBB, referring to an unauthorized charge she found on a credit card statement.
There is a resource to help you research these online sites. You can visit the National Motor Vehicle Title Information System’s publicly approved VIN lookup websites to see if a site you’re considering for an auto’s history report made the list.
In addition, your BBB and the Federal Trade Commission offer the following tips to help you minimize the chance of being a victim of a virtual vehicle scheme:
› Buy local and view the car in person.
› Look for franchised dealerships or licensed sellers online and check the companies first with BBB at bbb.org.
› In the case of rare vehicle purchases, shop online but use a service with buyer protections.
› If personal information is stolen, run a credit check for fraudulent activity and place a freeze on your credit if your social security number appears to be compromised.
› Whenever possible, use a credit card for online purchases. Never send money to someone you don’t know through a cash payment app.
› Review charges on your bank and credit card statements often and report any unauthorized charges to your financial institution as soon as they are detected.
For more information, visit BBB’s page devoted to findings from our 2024 Study on Virtual Vehicles. You can contact your BBB at 423-266-6144 or tngabbb@chattanooga. bbb.org.
Michele Mason is president of the Better Business Bureau in Chattanooga.