Auto fraud accounts for 12 percent of all online purchase scams, totaling $64 million in consumer losses, according to the most recent Internet Crime Complaint Center annual report. Dependable Auto Shippers, one of the largest vehicle shipping service providers in the world, wants to make people aware of just how big of a risk this fraud poses.
"Shipping vehicles for online consumers is a large portion of our business, and we receive hundreds of calls every month from those who have fallen prey to online auto scams," said John Roehll, executive vice president and co-owner of DAS. "We want to raise awareness for consumers to be vigilant against scammers and protect them from online auto fraud."
DAS said that scammers entice their victims with incredibly cheap prices and the promise of using a shipping service to deliver the vehicle. They'll also demand immediate payment due to some bogus reason, such as military deployment or a tragic family emergency. Victims then send an unrecoverable payment through a money transfer or money order for a nonexistent vehicle.
The average amount of money lost on one of these scams is $3,700, according to the Internet Criminal Complaint Center.
DAS offered five tips you should follow in order to prevent yourself from used car fraud:
1. Never wire payment
Legitimate dealers will never ask for a wire transfer. If you're dealing with a private seller and they want you to us something like Western Union, request an alternate form of payment. Scammers use wire transfers because it is essentially the same thing as sending cash in the mail. Once the money is gone, it cannot be recovered.
2. Talk on the phone
A seller making excuses for not being able to speak on the phone is a big red flag. By speaking with the seller (email doesn't count), you can get more info on the background and history of the person or business.
3. Slow down
If a seller says the vehicle is being held by a transportation company and will ship as soon as payment is received, take a minute to call the shipping company to validate the arrangement. Scammers love to pressure their victims into quickly sending payment with fake sob stories or really low prices on the car. You need to be diligent, do your homework and take your time with a big purchase like this.
4. Examine information carefully
A listing with stock images of the car without a visible license plate is an indication of a scam. If there are pictures, make sure the colors, body work and other distinguishing features match up with the description.
5. Get your own CARFAX report
Scammers like to pull real CARFAX reports of cars that do exist for their fake listings. You absolutely should order your own vehicle history report. The National Insurance Crime maintains a free database that includes flood damage and other information so consumers can investigate a car's history. Always check that the registration or license plate matches the seller's name.