10 Tips to Avoid Internet Car Sales Rip-offs
Nearly 1,000 people recently lost up to $5,000 each in a simple yet elegant Internet car swindle.
The con men posed as a legitimate Memphis-based car dealership, complete with a fake website but a real snail-mail address and contact information. Their goal: Identity theft.
Despite the ease and general safety of shopping over the Internet, thieves abound. It’s often said but rarely taken into consideration: Fraud happens to everyone else until it happens to you.
This latest Memphis automotive concept is one of many and was large enough to catch the attention of the Better Business Bureau. The BBB report warns of similar websites masquerading as dealerships in Colorado, Florida, Georgia, Michigan, New Mexico, Texas and Kentucky.
Below is a checklist of tips to protect yourself, your identity and bank account when car shopping online. As always, if you feel uneasy, hold onto your money. Once it’s gone, it’s gone for good.
Learn more from the Go Frugal blog for tips on buying a new auto legitimately.
1. Talk With Humans
This is the easiest way to protect yourself. It’s an automatic red light if your only contact with a dealership is through instant message or e-mail. Always request to talk over the phone. If they refuse, don’t buy from them.
2. Beware “Too-Good-to-Be-True” Deals
It’s tough to pass up an incredible deal. After all, it’s what you were looking for in the first place, right? But if something seems a little too good, it most likely is. Be wary of anything with no comparison. The Kelly Blue Book is a go-to source for ballpark figures.
3. Check Car Type and Dealership
Most con artists claim to deal in repossessed and used cars, making extreme discounts seem more plausible. They also target locally-owned dealerships that are easy to imitate and, in turn, hard for you to verify.
With the Memphis swindle, people from a slew of different states bought cars they only saw over the Internet. Try and buy in-state from a lot you can visit personally.
4. Avoid Wire Transfers
Never wire money directly in a single person’s name. It’s the same everywhere in cyberspace, whether you’re purchasing a car or “helping” some obscure African prince. Buyers were told by the bogus Memphis dealership they could “legally avoid taxes” by sending cash to an individual. Yeah, right.
MoneyGram, a favorite of con artists, is legitimate and safe when making payments to a certified business. But as many victims find, wire services are not liable for stolen money and there is little chance of tracking it down.
5. Haste Makes Waste
The trick is old, but enticing nonetheless. Con artists convince you their deal will last a very limited time, rushing you into a purchase with little chance for research.
Many fake auto sites are active for several days before they disappear, only to reappear with a different URL. Wait at least a week or two before committing to a sale. Lie or not, a car should always be treated as an investment.
6. Carefully Examine the Entire Site
Fraudsters are very clever. Along with stealing and posting real information, some even include links to carefully crafted Carfax reports and bogus BBB certificates. Check directly through BBB.org for accredited businesses.
Also, take a close look at the site URL. The real Memphis dealership, America Auto Sales, doesn’t use "America" in their web address. The bad site, which is no longer operational, was americautosales.com. (Also notice only one “a” in the middle.)
7. Check Information From Multiple Computers in Case of a Virus
Bad sites often carry viruses and cookies that prevent you from viewing the real dealership's site, even in search engine results. All this makes verifying a company nearly impossible.
One solution is to use a different computer and verify info. (But don’t visit the original site from the second computer or you’ll infect that computer with a virus as well.)
If multiple sites appear claiming to have the same address, phone number and name, your computer might be infected. Have it looked at by a professional and invest in reliable virus software.
Don't be afraid to pick up a good-old-fashioned phone book and call the dealership directly.
8. Be Wary of Customer Reviews
Review sites are a great way to judge the quality and reliability of any business. But online fraud continues to be lucrative when legitimate, open-content sites are used to promote cons.
Merchant Circle, a small business review provider, was (and still is) exploited by multiple fake dealership sites. Watch for name dropping or when a reviewer gloats about a specific person. This tactic can make a questionable business seem certifiably real.
9. Double-Check Security Sites and Authenticity
It seems like the tools in a con artists arsenal are never-ending. Along with the abuse of legitimate services, many tout certificates (the little badges that appear in the bottom corner of a websites home page) from fake e-security sites. Three recently uncovered ones are E-WebSecurity.org, Website-Secure.org and the still-functioning E-WebsiteSecurity.org.
Look for security seals by WebSecure.org, VeriSign or TRUSTe. While these seals don’t guarantee a business is wholly on the up-and-up, they’re a good start.
10. Report Suspected Activity
Silence is the con artists best friend. If you smell a rotten egg or already fell victim to fraud, report it online at the Internet Crime Complaint Center and tip off your regional BBB.
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