Vehicle scams are at an all time high internationally for
both sellers and buyers. Going into a heightened time of car
sales, it is important to be cautious and aware of what
scams are currently in action.
Research and consulting
company Frost and Sullivan predicted that in 2025, 6 million
cars will be sold online, a 600% increase from the 2019
sales. We have already seen a dramatic increase in sales
online, with scammers citing COVID as a way to avoid
face-to-face transactions. Over summer in America
rental car scams were prevalent. With online scammers
falsely posing as rental car companies, using url or domain
names that were similar to well known rental car companies
in order to access holiday makers’ details. Often requesting
prepayment or deposits on a car prior to the date of
pick-up.
Australia also peaked in vehicle sales scams
in 2021, with $288,000 lost through car scams in the first
quarter of 2021. Projecting that Australians would lose over
$1million due to car scams by the end of this year. A common
scam that was being recorded in Australia was scammers
impersonating defense employees, saying they were being
deployed overseas and had an urgency to sell their car.
Buyers would then be pressured into purchasing a car that
they have never viewed, and ultimately did not exist. Australian
Competition & Consumer Commission (ACCC) reported
that although potentially $1million is estimated to be lost
in 2021 to car scams, 80% of the people reporting scams
avoided losing money. Potentially still exchanging personal
information or contact information. Showing the prevalence
of the scams in the country.
The most common car scam
that New Zealand saw during summer 2020 was the ‘paying
with cheque scam’. This scam combined the use of old
school cheques, and Facebook marketplace. Where car sellers
were offered a cheque, that would “take a few days to
clear”, and their purchaser would take the car on delivery
of the cheque. The cheque would then not clear, or be false
leaving the seller out-of-pocket and with no car. In
response, police warned of the risks of unregulated
trading online via Facebook Marketplace – where the scams
took place.
Red Flags to be aware of when buying or
selling a car online.
- Fake Ads: Fake Ads often
look quite legitimate, but if the seller is not willing to
let you view the car or tries to rush you through the
process without an inspection then this is likely because
they cannot offer what they are trying to sell. - SMS
Scams: A text to sellers requesting more information via
email. This tends to be an attempt to get more personal
details, to avoid this scam make sure to ring the caller to
verify identity. - Alternative Payment Methods (for
Buyers): When the seller of the car requests payment through
alternative methods such as gift cards or Western Union this
is not necessary and should be avoided at all
costs. - Alternative Payment Methods (for Sellers):
When a buyer requests to pay via cheque, Stripe or Paypal
these methods should be also avoided in a car sale
transaction. - “Title
Washing”: When the vehicle history has been wiped or
falsified – you can gain a vehicle history report through New Zealand AA or other
public means. - Outstanding Finance: AA
states that when you make a purchase of a car, the
finance owing on the car can be transferred to the next
owner. Make sure to check if there is finance owing on the
car before making the purchase.
Shopless, is an New
Zealand online marketplace that encourages users to be more
vigilant and aware over the summer holiday season. Even with
the signup process offered by online marketplaces such as
Shopless, it is the seller and buyers responsibility to take
extra precautions to ensure their sale is completed
successfully.
If you are unsure or uncomfortable when
purchasing or selling a car you can contact the Waka Kotahi (NZTA) for
the latest scam information and advice. With an increase in
car sales and purchases over the summer period, it is
important to do due diligence and ask advice when buying or
selling your
car.
