As more and more people turn to online platforms to buy and sell cars, more and more cases of car-purchase escrow scams are being reported.
A newly published report has revealed the dark side of the growth in online car buying.
They operate by convincing buyers to deposit payment with a dubious escrow company with the promise that the escrow company will release the money when the buyer has received the car.
That sounds like a great deal, right? Unfortunately, in this case, the escrow company is completely fictitious. Or it might be a shadow company that the supposed seller owns.
According to the Internet Crime Complaint Center (IC3), thousands of fake car escrow scamming incidents have come to their attention of late. The IC3 is supported by official agencies like the FBI.
According to the Better Business Bureau, complaints of fake car escrow scams come in every day by the thousands.
The scam is quite successful because at least 40% of the victims of the scam do pay the ‘escrow’ companies and their hard-earned money is lost.
The current Coronavirus pandemic has only made things worse because more people are trying to buy cars online, and scammers can now argue that they are in self-isolation and cannot meet would-be car buyers.
The scammers will talk their unsuspecting victims into using their fake escrow service which is supposed to see that sellers get paid when the buyer has received the car and is satisfied. Of course, it ensures that they get paid anyway.
BBB Investigators believe that Romanian criminal gangs are behind the scams. Even after dozens of scammers were arrested for their crimes, the con game continues unabated.
The BBB expects cases of online car sale scams to soar higher than ever, even though they argue that most cases of car buying escrow scamming don’t get reported.
Spot the Warning Signs
One of the tell-tale signs that you are probably dealing with a scammer is that the car you want is going for much lower than the market price. There is such a thing as a deal that is too good to be true.
When the seller claims that they are selling the car urgently because someone in their family has just died, or they are getting divorced, or they have just been deployed with the military, it could be a sign of trouble.
Scammers will often come up with excuses not to meet with car buyers and let them see the vehicle.
They will assure you that your money is protected by either a nonexistent escrow service or a fictitious guarantee from eBay, Facebook Marketplace, or even Craigslist.
Sometimes scammers will claim that they are not in a position to speak to you but will leave voicemails namedropping some big names.
There is a simple way to avoid these online car buying scams. Never go through with a car deal unless you can meet the other party face to face and inspect the car you are buying as well as its title.
Even when they have a convincing story to tell (and boy do they always do) and the price of the car is so enticing, you should never buy a car you haven’t inspected physically.
Even when you are in a position where you cannot physically go and see the car, consider paying legal car inspection services to look at the car and give you an objective report as well as meet the owner of the car and inspect its title.
In case you want to make use of an escrow service, let it be an escrow company of your choice – not one that the seller recommends to you.
Don’t go through with the deal until you have done some online research into the background of the escrow service you have chosen. CWP