Understanding the Risk of Fraud When Buying or Selling Vehicles

It is important during an unstable economic period to make thoughtful and careful purchasing decisions – and not ones based on desperation. The pandemic has left many buyers and sellers of vehicles under pressure to avoid their financial, social and emotional vulnerability being used against them.

The increase in Internet use and online communication – over the course of the pandemic –allows fraudsters to find new ways of conducting scams behind the anonymity of the Internet. Vehicle buyers and sellers are commonly targeted by online criminals who conduct scams to acquire money or cars illegally. The pandemic has reduced face-to-face contact and puts potential victims of fraud at more risk over the Internet.

If it sounds too good to be true, it probably is. We need to be cautious when conducting purchases and sales online or over the phone, especially when large assets (such as vehicles) are being transferred. Although there are laws and regulations that are designed to protect vehicle sales, online fraudsters have conducted their scams by taking advantage of the current global instability.

What is a vehicle scam?

Scams are defined as fraudulent, intentional and deceptive activities conducted by criminals with the intention of stealing money or possessions from an individual, organisation or company. Vehicles are a valuable asset and are therefore a common target for Internet, email or mobile scams These criminals are referred to as ‘scammers’ or ‘scam artists’ and have become a more prevalent criminality due to South Africa’s (and the world’s) increasing online activity.

Vehicle sales and the risk of online fraud

The proliferation of online access has had an incredible impact on vehicle sales and created new opportunities for buying and selling cars, legally and securely. Unfortunately, opportunities for online fraudsters to target vulnerable or uninformed Internet users has increased too. Scam artists prefer to use emails and text messages to ensure their anonymity while communicating with potential victims.

Yes, many of the transactions and interactions associated with the buying and selling of vehicles are done online. Online sites give those buyers and sellers a chance to maximise the value and speed of their trade. An important component of safe online trading is maintaining regular procedures, such as in-person meetings, test drives, signing documents and background checks.

How do vehicle scams work?

In order to avoid becoming a victim of a vehicle scam, you need to know how they work and what techniques are commonly used to defraud the victims. The methods used to scam potential buyers and sellers are not always the same, but aspects of all those methods will have shared traits and tools that you should be aware of.

Vehicle scams often begin with some type of unusual financing request from the buyer or seller involved in the fraud. They might request cash in full for a purchase or send you a cheque that bounces after you have shipped the vehicle. Scam artists might insist on a substantial deposit for a vehicle that never arrives before becoming impossible to contact.

Most online fraudsters will hide behind falsified email accounts that offer little information about them or the company they are pretending to represent. They might offer incorrect or insufficient contact details, while avoiding personal questions and making excuses. Scammers are gifted at taking advantage of an online trader’s eagerness to find a good deal, like going above your asking price or offering a car well below market value.

Scammers will list vehicles or represent companies that do not exist, copying and pasting images to share across multiple online trading platforms. Elite scam artists will create fake banking documents and web portals to make their criminal activity look legitimate. Even further, scammers create sob stories and traumatic scenarios to garner sympathy and encourage victims to make snap decisions.

Scammers will claim to be in different cities and use that to avoid in-person meetings, checks and test drives. Their techniques and methods have evolved to keep up with the growth in online trade. Replacing VINs, hiding vehicle histories and rolling back the odometer are classic vehicle scams that are still happening today. This may have an actual vehicle involved, but what is being sold turns out to be a dud or stolen.

Stay safe and minimise the risk of fraud

If you are considering buying or selling a vehicle, it is important to remain cautious of potential scammers. With the necessary caution in place, you should be able to protect yourself from being caught up in an online fraud scheme. Here are a few tips to keep in mind when attempting an online vehicle trade to help you avoid a scam:

  • Get to know the buyer or seller you are talking to
  • Make sure they are contactable (real email addresses and phone numbers)
  • Identify the vehicle being bought, ensuring accurate registrations and VINs
  • Check and verify vehicle history and odometer readings
  • Do not be overeager and quick-to-pay money or ship a vehicle
  • Perform all meetings, deals, interactions and money exchanges in a safe place
  • Do a proper test drive and meet the buyer or seller in person
  • Be guarded in your trust and listen out for falsehoods or potential schemes
  • Avoid using false banking, insurance or payment sites
  • Ensure the security of all financial or vehicular exchanges

At MarisIT, we are committed to protecting South Africans from the growing threat of online fraud. We offer a range of products and services designed to mitigate cybersecurity risks and keep your online finances secure and free of fraud. Contact MarisIT today and find out how we can help you stay safe online!

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