Now, from the comfort of your home or office, you can make a complete car purchase on the Internet. According to a study done by J.D. Power and Associates, 62 percent of all new vehicle buyers are turning to the Internet for shopping information.
Scammers are lulling consumers into a false sense of confidence in their business transactions. Using fake escrow accounts, these scam artists can steal thousands of dollars from unsuspecting consumers.
Better Business Bureau offers the following tips to help make your online car buying experience a satisfactory one:
The Scam:
- To establish a level of security, seller/scammers set up "holding accounts" to protect the buyer's money until the product arrives.
- Scammers mimic trusted names - or names that sound similar - (eBay, PayPal, BBB Purchase Protection Plan, etc.) from real businesses to make their e-mails and Web sites look legitimate.
- The fake escrow company will email you directions:
- Asking you to wire money to "x" location
- Asking you to deposit directly from your account to an escrow account.*
- Some scam artists have gone so far as to use the Better Business Bureau logo or name to try to convince buyers that an escrow service was operated by or endorsed by BBB. Shoppers are advised to always contact BBB when there are questions concerning the legitimacy of a service or retailer.
* These escrow sites are either completely fake or the information has been stolen.
Red Flags:
- Item is priced far under market value.
- "Must sell now", "Deployed Overseas" or any other high pressured tactic to push you into purchasing immediately.
- Pressure to use a specific escrow service rather than a well-known or local company.
- Any type of money wire request (Western Union, Money Gram, etc). Legitimate escrow companies do not conduct business through money wires.
- Asking you to verify personal information such as: account numbers, verification of birth dates, SSN, etc.
- Seller gives little to no contact information to buyer.
- Correspondence from escrow service is impersonal, such as "Dear Sir." In addition, e-mails may boast grammatical errors.
- Shipping item free of charge, from out of state or country.
To help ensure satisfactory Internet transactions, BBB encourages bidders to:
- Verify the seller's identity and check their feedback rating before placing a bid. If you can't find any information on the seller, avoid doing business with them. Don’t rely on e-mail alone; some sellers use a forged e-mail header. Get the seller's phone number and confirm that it is in service.
- Know the terms of the transaction.
- Who pays for shipping and delivery?
- Does the item come with a warranty?
- What is the seller's return policy?
- Insist on paying with an online payment service or a credit card. If you don't receive the merchandise, you can challenge the charges with your credit card issuer.
- If you decide to use an online payment service, know what protection you are afforded if the seller fails to ship the goods. Using a credit card to pay for goods through an online payment service will afford you "charge back" rights.
- Be cautious if the seller asks you to pay by check or money order as you will have little recourse if the transaction goes awry. The Federal Trade Commission recommends in general that buyers not wire money either. If something goes wrong with the transaction, the buyer most likely will lose their payment.
- If the purchase is a big one, you might want to use a third-party escrow service that will hold your payment until you receive and approve the merchandise. Always verify that the escrow service is a reputable company. If the seller insists you use a specific escrow service and you cannot confirm its legitimacy, back away from the deal.
About your BBB serving Alaska, Oregon and Western Washington:
Your Better Business Bureau is a not-for-profit organization funded by Better Business Bureau Accredited Businesses. The BBB's mission is to be the leader in advancing marketplace trust. For more information about the services and products provided by your BBB, call 206-431-2222 or 253-830-2924 in Washington, 503-212-3022 in Oregon, 907-562-0704 in Alaska, or visit our Web site at www.bbb.org.