Internet Scam: Online Auto Scams

This type of scam fits under other scam strategies I've discussed in the past but I'll separate it out because of the niche nature of this one.

Here's how it works:

Scammers pretend to be either Kelley Blue Book agents or possibly a person moving out of town and needing to sell a car quickly before they leave. Like other scams, the criminal sets up a persona that helps them appear legitimate.

The price for the vehicle is usually at a great discount, too good to pass up (that's a red flag. When it seems too good to be true, it IS too good to be true!) When a buyer shows interest in the vehicle, they are asked to send a deposit to a third party to hold while the inspection takes place. Here's the main red flag to look for - they will ALWAYS ask this be sent via wire transfer, like Western Union or MoneyGram. Do not do money transfers online EVER and you'll be a lot safer. Unfortunately, for those victims that do send the money, there is no legitimate third party. Once the scammer collects the deposit, the transaction is completely untraceable and the victim is left without their money or a car.

In 2011, the Internet Crime Complaint Center (IC3) received 4,066 complaints from victims of auto-auction fraud. The total financial cost to these victims was more than $8 million, with the average loss being $2,000 per victim. The calls reporting these scams averaged two per hour.

That's insane! We need to bring these numbers down by educating as many people as possible to not do wire transfers online, as a starting point.