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Car Scams - How to Spot Them |
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Take caution when buying or selling a car. Car scams are common, especially for online car deals. Online Car Seller Scam It is difficult to spot this car scam simply by reading the ad. It's easier when you see what happens next. When you contact the seller (usually email only), you'll be told that the transaction is "protected" by the "eBay Protection Program" or a "certified escrow company" (none of which actually exist for cars purchased outside eBay), that the vehicle will be shipped to you at no cost, and that you will have some number of days to inspect and drive the car before deciding whether to keep it or ship it back to get your money back. Of course, these is no car, there is no eBay protection plan for non-eBay cars, and when you send your money to the "protected" account named by the seller, the money goes directly to him. Oh, by the way, these scammers often use a female name so that you'll feel safer. What can you do to avoid such a scam? Look for the telltale signs of the scam — low advertised price, has a money "protection" plan, will ship the car for free, and gives you a number of days to decide if you want the car. If you want to buy a car online, only buy local cars that you can go see, inspect, drive, and meet the seller in person. Long-distance car buying is inviting problems. What can you do if you have already been caught by the scam? Not much. Your check has already been cashed by the time you figure out something is wrong. You can report it to police, but the scammers are experts at staying under the radar of law enforcement. Online Car Buyer Scam The "buyer" (scammer) offers to send you a cashiers check (or money order) for the amount of the price of the car, plus an additional amount. The additional amount is explained in a variety of ways, including as being for his "agent" to ship the car to him in his country. You are instructed, when you get the check and deposit it in your bank, to send the "extra" money to his "agent." So, what's the catch? The "certified check" or "money order" is counterfeit (fake, bogus, no good). It looks very real, so much so that your bank will accept it and deposit the money in your account. Then you write a check out of your account, as instructed, for the "extra" money that is sent to the "agent." Then, unbelievably, your bank calls in a few days, maybe a week or so, later and tells you that the check was bad and the funds have been removed from your bank account. Whoops! The car scammer now has cashed your check and if you don't have the money in your account to cover it, the bank comes after you to make it good. The bank takes no responsibility for the problem. That's right. It's not the bank's fault. How to avoid the car buyer scam? Watch for the easy-to-spot characteristics: wants to buy your car sight unseen for your asking price, will send a check or money order for more than your asking price, and wants you to send some of the money to an "agent." If you are unsure about the deal, deposit the check in your bank and wait a couple of weeks to let the bank figure out if it's real or not. If you tell the buyer this is your plan, you can assured that the deal is off, since it upsets his plan. It's best to sellonly to local buyers that you can meet and talk to. What can you do if you get caught in this scam? Not much. You can report it to the police, FBI, and Federal Trade Commission but the scammer is in another country, knows how to avoid identification, and is long gone — working on the next victim. Other Car Seller Scams There may a good legitimate reason the seller is selling cheap — needs money desperately, divorce, lost job, sickness — but it also may mean the car has hidden problems, is a wrecked salvage vehicle, is stolen, or is a legal "lemon" (bought back by car manufacturer because of persistent, unfixable problems). If the seller doesn't disclose these problems, it is not illegal since nearly all used cars are sold "as-is" without guarantees or warranty. What this means is that it's the responsibility of the buyer (you) to determine the real condition and history of the car before you buy. To avoid this scam, get a mechanic to inspect any such car before you buy. It will cost you maybe $75-$100 but can help you avoid a multi-hundred or multi-thousand dollar mistake. Also get a CarFax vehicle history report, based on the car's VIN, to find out if the vehicle has been wrecked or bought back by the manufacturer. Also ask the seller to let you examine the car's title to make it is in his/her name and ask to see a photo ID to match to the title. If the seller doesn't have the title, do not give him any money until he can produce it. If the car is stolen, or otherwise doesn't belong to him (could have belonged to wife in a divorce), then it's not his to sell. If he stills owes money on the car and promises to send you the title later after the loan has been paid off, don't fall for it. If you have to, go with him to the bank to pay off the loan with your money. If he refuses, the deal is probably a scam. Sources of Cheap Cars
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