http://www.consumeraffairs.com/news04/2010/07/car_dealer_scams.html

Car Buyers Beware: Scam Artists Impersonating Car Dealers


Unsuspecting consumers lose big deposits and don't get the car they bargained for

















By Lisa Wade McCormick

ConsumerAffairs.com



July 13, 2010

• More Scam Alerts ...





A Tennessee car dealer has a warning for consumers cruising the Internet for good deals: don’t send any money unless you’ve physically seen the vehicle and are certain you’re dealing with an actual business.



Officials with America Auto Sales in Memphis say car buyers who didn’t heed that advice recently lost thousands of dollars in a nationwide scam.



And the con artists behind that ruse fraudulently used the dealership’s name and address in their money-making scheme.



“We had customers calling and asking us about vehicles that were supposedly here, but did not exist with our company,” Roger Haney, coordinator for America Auto Sales, told ConsumerAffairs.com. “As we started asking more questions, people gave us a Web site that they thought was ours.”



But that Web site -- www.americautosales.com -- turned out to be a fake one set up by crooks trying to swindle unsuspecting consumers buying cars online.



“Customers wanting to purchase cars with this so-called America Auto Sales were told to wire money to this non-existent company,” Haney said. “They were thinking that they were purchasing a car online, but all they were really doing was sending scammers their money.”



The con artists, though, made the transactions appear legitimate -- at least for a while.



“Customers who wired their money were sent back a confirmation statement saying they’d bought the cars,” Haney said. “And they were then directed here (to America Auto Sales) to pick up their vehicles. I had one person show up with papers in hand – and a receipt – looking for his new vehicle.



“This all happened so fast,” he added. “By the time we figured out what was going on, it was too late (to prevent consumers from sending their money).”



Victims nationwide

The sham hoodwinked car buyers across the country, Haney said.



“We had 1,000 or more calls from consumers nationwide during a two-week period,” he said. “Our phones rang constantly. We had several hundred calls the first day. We talked to people who sent in anywhere from $2,000 to $3,000. One man who called us was prepared to purchase a $24,000 BMW.”



When America Auto Sales uncovered the hoax, Haney said it contacted authorities and the hosting company for the bogus Web site.



“In a matter of days, the Web site was down,” he said, adding authorities are investigating the scheme. "But then it was back up temporarily. It’s back down now, but we still want to get the word out that this is a fraudulent Web site.”



The Better Business Bureau (BBB) said this online car caper isn’t an isolated incident.



The organization said it’s received similar complaints from consumers across the country who thought they were dealing with reputable online car companies.



Those car buyers, however, soon discovered they’d sent their money to scammers posing as legitimate car dealers.



“Because scammers essentially steal the identity and good name of real auto dealers, car shoppers will think that they’re buying a car from a reputable business,” said Stephen A. Cox, president and CEO of the Council of Better Business Bureaus. “The truth is, they’re being sold a bill of goods by a coordinated, agile and in all likelihood overseas outfit of scammers.”



The phony Web sites advertise repossessed cars at prices well below market value, the BBB said. Car buyers are often instructed to wire a deposit -- as much as $5,000 -- to an individual instead of the company. The Web sites claim this is done to “avoid taxes legally.”



After consumers send in their deposits, they’re told the balance is due when the cars are delivered to their homes -- supposedly in five days. When the cars never arrive, consumers contact the real dealerships to arrange delivery. And that’s when they learn they’ve become victims in this scheme, the BBB said.



Con artists have set up bogus Web sites posing as legitimate car dealers in Tennessee, Colorado, Florida, Georgia, Michigan, New Mexico and Texas, the BBB said. The Web sites are often taken down after a few days, but new ones usually resurface with different URL addresses and under the names of other car dealers.



Tips for car buyers

The BBB said car buyers can protect themselves from getting taken in one of these online schemes if they steer clear of:



• Web sites that advertise prices that are too good to be true;

• Dealers who only communicates through chat or e-mail -- and never by phone;

• Dealers who only accept payment by wire transfers.



“Consumers need to be cautious and do some research before they buy big ticket items online,” said America Auto Sales’ Haney. “I wouldn’t purchase a vehicle unless I physically see it and know it’s from a bona fide, legitimate dealer.



“We’ve never had anything like this happen before,” he added. “This was puzzling for everybody involved, and the consumers who contacted us were disappointed and upset.”



Consumers who’ve lost money in a fraudulent online car deal can file a complaint with the Internet Crime Complaint Center (IC3). The Complaint Center is a partnership between the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C) and the Bureau of Justice Assistance.







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