You can buy almost anything over the Internet—including clothes, a pizza, music, a hotel room, even a car. And while most transactions are conducted lawfully and securely, there are instances when criminals insert themselves into the marketplace, hoping to trick potential victims into falling for one of their scams.
Today, the FBI’s Internet Crime Complaint Center (IC3) issued an alert about a specific type of cyber scam that targets consumers looking to buy vehicles online.
How the scam works. While there are variations, here’s a basic description: consumers find a vehicle they like—often at a below-market price—on a legitimate website. The buyer contacts the seller, usually through an e-mail address in the ad, to indicate their interest. The seller responds via e-mail, often with a hard-luck story about why they want to sell the vehicle and at such a good price.
In the e-mail, the seller asks the buyer to move the transaction to the website of another online company….for security reasons….and then offers a buyer protection plan in the name of a major Internet company (e.g., eBay). Through the new website, the buyer receives an invoice and is instructed to wire the funds for the vehicle to an account somewhere. In a new twist, sometimes the criminals pose as company representatives in a live chat to answer questions from buyers.
Once the funds are wired, the buyer may be asked by the seller to fax a receipt to show that the transaction has taken place. And then the seller and buyer agree upon a time for the delivery of the vehicle.
What actually happens: The ad the consumer sees is either completely phony or was hijacked from another website. The buyer is asked to move from a legitimate website to a spoofed website, where it’s easier for the criminal to conduct business. The buyer protection plan offered as part of the deal is bogus. And the buyer is asked to fax the seller proof of the transaction so the crooks know when the funds are available for stealing.
And by the time buyers realize they’ve been scammed, the criminals—and the money—are long gone.
Red flags for consumers:
- Cars are advertised at too-good-to-be true prices;
- Sellers want to move transactions from the original website to another site;
- Sellers claim that a buyer protection program offered by a major Internet company covers an auto transaction conducted outside that company’s website;
- Sellers refuse to meet in person or allow potential buyers to inspect the car ahead of time;
- Sellers who say they want to sell the car because they’re in the U.S. military about to be deployed, are moving, the car belonged to someone who recently died, or a similar story;
- Sellers who ask for funds to be wired ahead of time.
Number of complaints. From 2008 through 2010, IC3 has received nearly 14,000 complaints from consumers who have been victimized, or at least targeted, by these scams. Of the victims who actually lost money, the total dollar amount is staggering: nearly $44.5 million.
Automotive Brand Hijackers Use False Protection Claims and Live Chat to Lure Online Auto Shoppers
August 15, 2011
- Online vehicle shoppers are being victimized by fraudulent vehicle sales and false claims of vehicle protection (VPP) programs.
In fraudulent vehicle sales, criminals attempt to sell vehicles they do not own. Criminals create an attractive deal by advertising vehicles for sale at prices below book value. Often the sellers purport they need to sell the vehicle because they are being moved for work or deployed for the military. Because of the alleged pending move, criminals refuse to meet in person or allow inspection of the vehicle, and they often attempt to rush the sale. To make the deal appear legitimate, the criminal instructs the victim to send full or partial payment to a third-party agent via a wire transfer payment service and to fax their payment receipt to the seller as proof of payment. The criminal pockets the payment but does not deliver the vehicle.
Criminals also attempt to make their scams appear valid by misusing the names of reputable companies and programs. These criminals have no association with these companies and their schemes give buyers instructions which fail to adhere to the rules and restrictions of any legitimate program. For example, the eBay Motors Vehicle Protection Plan (VPP) is a reputable protection program whose name is commonly misused by these criminals. However, the VPP is not applicable to transactions that originate outside of eBay Motors, and it prohibits wire transfer payments. Nevertheless, criminals often promise eBay Motors VPP protections for non-eBay Motors purchases, and instruct victims to pay via Western Union or MoneyGram.
In a new twist, criminals use a live chat feature in email correspondence and electronic invoices. As live chat assistants, the criminals answer victims’ questions and assure victims that the deals are safe, claiming that safeguards are in place to reimburse the buyer for any loss. The criminals falsely assert that their sales are protected by liability insurance coverage up to $50,000.
Automotive shoppers should exercise due diligence before engaging in transactions to purchase vehicles advertised online. In particular, shoppers should be cautious of the following situations:
- Sellers who want to move the transaction from one platform to another (for example, Craigslist to eBay Motors).
- Sellers who claim that a buyer protection program offered by a major Internet company covers an auto transaction conducted outside that company’s site.
- Sellers who push for speedy completion of the transaction and request payments via quick wire transfer payment systems.
- Sellers who refuse to meet in person, or refuse to allow the buyer to physically inspect the vehicle before the purchase.
- Transactions where the seller and vehicle are in different locations. Criminals often claim to have been transferred for work reasons, deployed by the military, or moved because of a family circumstance, and could not take the vehicle with them.
- Vehicles advertised at well below their market value. Remember, if it looks too good to be true, it probably is.
If you have witnessed this behavior or fallen victim to this type of scam, please file a complaint with the Internet Crime Complaint Center (IC3) at www.IC3.gov.
The Internet Crime Complaint Center (IC3) is a partnership between the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA).
The IC3’s mission is to serve as a vehicle to receive, develop, and refer criminal complaints regarding the rapidly expanding arena of cyber crime. The IC3 gives the victims of cyber crime a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. For law enforcement and regulatory agencies at the federal, state, local and international level, the IC3 provides a central referral mechanism for complaints involving Internet related crimes.