Fraud alert: car-buying scams on the rise – National Consumers League

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March 22, 2011

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC – Consumers in the market for a used car this spring should be on guard against unscrupulous sellers looking to take them for a ride, warns the nation’s oldest consumer group. In response to an increase in consumer complaints to the National Consumers League’s Fraud Center, the nonprofit group is warning consumers that, with the arrival of the upcoming peak car-buying season  comes increased risk of falling victim to a scam.

“Scam artists prey on consumers in search of a bargain, and these scams are no exception,” said John Breyault, Director of the Fraud Center. “Unfortunately, the only person that’s getting a steal are the con artists themselves.”

The National Consumers League, founded in 1899, operates a Fraud Center that has been tracking scams and providing consumer education about fraud since 1992. Since the beginning January 2011, NCL’s Fraud Center has received more than 100 complaints from consumers nationwide about these scams, with a total reported loss of nearly $293,674.

The used car scams reported to NCL generally involve a classified listing on any of a number of popular sales and auction sites such as craigslist, Yahoo! Autos, or eBay. The listings are generally for late-model automobiles, often luxury brands, at well below market value. In the schemes, when the victim contacts the scammer, they are told that the seller is not local and that payment for the car itself or for shipment of the car should be sent via wire transfer to the seller. Often, the seller claims to be a member of the armed services who is either already deployed or preparing to deploy. As such, quick payment is necessary to ensure that the buyer received the “great deal” on the car.

“Scam artists are imaginative, and they have tricks aplenty to get a victim to trust them,” said Breyault. “However, consumers can protect themselves by recognizing the most common red flags involved in these scams and never, ever  rush to buy.”

NCL recommends consumers avoid used car sales with the following red flags:

  • the seller asks for payment via wire transfer or bank-to-bank transfer.
  • The car is listed at a price far below common market values (such as Kelley Blue Book value).
  • The seller asks for payment urgently since they are or will soon be relocating overseas.
  • The seller says that they are located overseas, but they have an American middleman or online escrow service that will hold the money until the vehicle is delivered.
  • The seller refuses to meet in person or communicate on the phone.
  • The seller’s email or instant messages contain multiple grammar and spelling errors.
  • The seller claims that the transaction is insured by a “protection program” associated with a real site (such as eBay, Google Checkout, PayPal, etc.) or another online payment system.

Victims of these or any other fraud are encouraged to file a complaint at www.fraud.org.

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About the National Consumers League

Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org