From The Better Business Bureau of Central Virginia:
Social distancing guidelines during the COVID-19 pandemic have fueled an unprecedented shift to online shopping for consumer goods of all kinds, including vehicles, with a particularly high demand for recreational vehicles (RVs). Many online platforms list cars, trucks, vans and RVs for very low prices, with sellers offering to make third-party delivery arrangements if the buyer pays via escrow. In reality, neither the automobile nor the escrow company probably even exists — leaving the buyer with nothing.
An in-depth investigative study by Better Business Bureau (BBB) finds that thousands of consumers have fallen victim to this scam, with losses totaling millions of dollars. The study — Virtual Vehicle Vendor Scams: BBB Study Reveals a Growing Scam Using Fake Cars and Escrow Companies to Steal from Unwitting Consumers — points to a heightened risk from this scam as demand increases for online vehicle purchases. Read the full study.
According to the study, websites such as Craigslist are rife with advertisements for low-price vehicles, with seemingly eager sellers often claiming that the reduced price is because of an upcoming military deployment, a divorce, or the death of a family member who owned the vehicle. Victims are directed to pay an “independent” third party typically by wire transfer, hold the money in escrow and ship the vehicle—which never is delivered.
Buying a vehicle online from a reputable seller can be a safe and convenient way to shop during COVID-19, but as with any high-profile situation, scammers are finding ways to take advantage of unwitting buyers. Consumers should use extreme caution so as not to let a low price and a sad story lure them into paying for a vehicle that does not exist.
Scammers sometimes claim that the transaction is protected by the eBay vehicle protection program. In other cases, they invent bogus websites connected to shipping escrow companies with addresses in towns across the U.S., particularly the Midwest. These will use names and addresses of real businesses or car dealerships.
Data suggests that fake online vehicle sales are increasing, but the scope of this fraud can be difficult to gauge because many law enforcement agencies do not track it as a separate complaint category. The Internet Crime Complaint Center has reported receiving thousands of vehicle escrow scam reports, with losses in the tens of millions. Criminal cases likewise reflect millions of dollars in losses. BBB receives hundreds of BBB Scam Tracker reports annually about fake vehicle shippers and escrow companies, with 41% of victims reporting they lost money.
Investigations and prosecutions in the US and Europe have connected this fraud to mostly Romanian nationals and others living in the U.S. and Europe. In educating consumers how to recognize and avoid vehicle escrow scams, the following applies:
· BBB recommends that law enforcement efforts to battle this fraud continue to increase.
· BBB should continue to share information with law enforcement and educate the public about red flags for this fraud.
· The platforms that scammers use should create ways to consistently screen out deceptive ads and educate users on how to avoid them.
Who to contact if you are the victim of a vehicle escrow scam:
· Better Business Bureau – file a complaint with your local BBB if you lost money or report a scam online at BBB Scam Tracker.
· Federal Trade Commission (FTC) – file a complaint online at ftc.gov or call 877-FTC-Help.
· FBI Internet Crime Complaint Center (IC3) – file a complaint online at ic3.gov/complaint.
· The platform where you saw a suspected bad ad such as:
o Craigslist –craigslist.org/contact
o Kijiji – kijiji.ca/helpdesk/safety/how-do-i-report-an-ad
o Facebook Marketplace – Facebook.com/help
o eBay – Forward suspicious emails to [email protected]
About BBB: BBB serving Central Virginia serves Richmond, the Tri-Cities, Charlottesville, and Fredericksburg, as well as 42 surrounding counties from Fauquier to Mecklenburg and Northumberland to Amherst. The nonprofit organization was established in 1954 to advance responsible, honest, and ethical business practices and to promote customer confidence through self-regulation of business. Core services of BBB include business profiles, dispute resolution, truth-in advertising, scam warnings, consumer and business education, and charity review.
