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April 15, 2016

Scammers Target Consumers Buying Cars Online

Sophisticated criminals set up fake websites using real dealership information to entice consumers to wire money for cars that do not exist

Iowans who consider buying a vehicle online should beware of criminals attempting to steal money by posing as legitimate dealers through fake websites, following two recent online car dealership fraud cases reported in Iowa.

Southeast Iowa Dealership “Identity Theft”
The latest case, reported last month to the Consumer Protection Division by a southeast Iowa dealership, involves a look-alike dealership website that used the legitimate dealership’s identity, including its name and address. The criminal or criminals placed vehicle ads through legitimate auto trade websites, and stole money from consumers who paid through wire transfers.

Following a complaint from the legitimate dealership, the Consumer Protection Division, along with the Iowa Department of Transportation’s Bureau of Investigation & Identity Protection, contacted the fake website’s host, which agreed to shut down the bogus site. State investigators referred the case to the FBI.

Other Site Uses Name of Closed Ames Dealership
In December, Ames police were alerted to a “Benson Motor” website that listed used vehicles for sale. The website and Facebook pages show an auto dealership that does not exist in Ames. Former Ames dealership Benson Motors closed in 2009. The Consumer Protection Division referred the case to the FBI.

“These can be pretty elaborate schemes, where criminals set up fake websites and place car ads in legitimate publications or sales websites,” Miller said. “It can be difficult for consumers to figure out what’s really going on until it’s too late,” Miller added, speculating that foreign criminals might be responsible. “In one case criminals not only victimized consumers, but also victimized a current Iowa business by stealing its identity.”

Common Signs of Used Car Dealership Scam
In these cases, criminals impersonate existing dealerships and set up an online presence. The sites can include a website, and ads placed through mainstream auto sales websites and publications. In some cases, the fake business may appear on Facebook, and other sites that list legitimate businesses and reviews. Criminals also post fake listings on sites such as Craigslist.

The listings, including luxury and antique vehicle ads, are often priced at a significant discount. The websites also list genuine information corresponding to a real dealership, but list different phone numbers and email addresses to redirect inquiries to the criminals.

Consumers who have contacted the imposters have been provided fake vehicle documentation, which adds a false impression of legitimacy to the transaction. Unsuspecting consumers who pursue the transactions are asked to wire thousands of dollars to purchase the vehicles.

General Advice

  • Buying a vehicle online, sight unseen, carries many risks.
  • Be wary of a seller who requests you to wire money, seeks payment through a prepaid money card, or who appears to want to rush the transaction.
  • Research the dealerships behind online advertisements before agreeing to transfer any funds for a car listed online.
  • Verify that contact information listed on a website matches other publicly available information for the dealership. Use other publicly available phone numbers and email addresses to contact the dealership independently to confirm the advertisements are legitimate.
  • If you pay online, make sure the website is secure.
  • It’s best to personally inspect a car in person before agreeing to transfer any funds for an online car purchase. If that’s not practical, try to arrange for a trusted representative to inspect the vehicle on your behalf.
  • Consider using an escrow service. As a neutral, third-party that holds and releases the payment, an escrow service protects both the buyer and the seller.

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