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Car scammers target Web buyers, sellers

By Lisa Goddard


Federal Trade Commission (FTC)
Electronic Commerce

WASHINGTON (CNN) -- If you want to buy or sell a car on the Web, watch where you turn. Experts say Internet scam artists are targeting just about every site out there, from eBay to Autotrader, where cars are often bought and sold sight unseen.

"It's a big deal," said Tara Flynn, assistant director of the Federal Trade Commission's Bureau of Consumer Protection.

She said buyer and seller scams are growing as quickly as the Internet itself and they are particularly dangerous with something like automobiles. "One of the biggest pitfalls is, it's a big-ticket item," she said.

The deals are large in scale and wide in reach, making it especially tempting to con artists and extremely harmful to those who are duped out of large sums of cash.

"It appears they're affecting every single known listing site for cars," said Jeff Ostroff, founder of, which lists more than a dozen car schemes.

Many, perhaps most, of the schemes start with links or ads placed on legitimate and popular Web sites. Those sites often catch the schemes early on, but not always.

Buyers are enticed with a sharp photo and a price well below market value. A recent ad on the popular site,, offered a 2005 Volkswagen Jetta for $6,000. Market value is more like $19,000.

In this case, the Jetta seller responded to an e-mail, saying she had moved to Europe and the laws there made registering the car nearly impossible. The supposed seller said she was living in London and gave an address near the center of town. That address turned out to be a hotel and managers had no record of the seller staying there.

Meanwhile, the purported seller kept e-mailing, suggesting the buyer send money through a "secure escrow" site, which would guard the funds until the car was delivered. That was followed by a bogus e-mail pretending to be from SquareTrade, a company that offers to protect buyers and sellers during online sales. But the e-mail asked the buyer to send money via Western Union, something SquareTrade does not do.

"These e-mails are all spoofs, and SquareTrade is in no way involved in this transaction," Chad Taylor, the head of SquareTrade's product management, said in an e-mail.

Ostroff said it's a common tactic among would-be scammers to solicit money under what looks like a legitimate deal from a legitimate company. "They can make their Web site look just like anything, like the Bank of America, or a credit union," he said.

Cracking down on Internet thieves

The FTC is highlighting such scams more and more, adding a prominent feature devoted to Internet sales on their prevention Web site, The agency and others use the term "auction fraud" to describe the phenomenon, but it's not limited to eBay. The government's Internet Crime Complaint Center said the term includes things like, where buyers and sellers negotiate outside the site.

The FTC doesn't track car deals separately, but Flynn says fraud from Internet sales or auction sites make up 12 percent of all complaints the agency gets. That worked out to about 45,000 complaints last year.

"It's a big deal when that many consumers complain to us about a problem," said Flynn.

With Internet car thieves, once you type in your account numbers, your money is gone. And if the car really exists, it's sitting in a driveway far, far away.

"The bad guys know we are very good at catching listings and attempts at fraud," said eBay spokesman Hani Durzy. He estimated eBay has 6 million listings every day and said a very small number of them are fake. and others have automatic mechanisms sparked by user input. On, if an ad looks suspicious, anyone can flag it as a possible scam. Once an ad gets a few flags, it's automatically deleted, said Clint Powell, a customer service manager with

In the case of the Jetta, that ad was up on the site for less than 10 hours. Similar ads placed in the next few days were taken down within two hours or less.

And officials say there are glaring warning signs consumers should be aware of:

  • The e-mailer won't give you his contact information, or the information doesn't check out.
  • The transaction involves a Western Union money wire or a supposed "escrow" account.
  • It is an unbelievably sweet deal.
  • "If it sounds too good to be true, it probably is," Durzy said.

    But it's not just potential buyers being targeted in these scams. Car sellers may not be safe either. Internet scammers make it seem like they've paid for your car, then you hand it over only to find out that the seller's large check has bounced.

    It usually happens like this: The scam artist sends an e-mail agreeing to the seller's price and offering a cashier's check to pay for it. The seller gets the check, and it looks like it's cleared into his bank account. Confident the money is in his pocket, the seller then lets a shipping company pick up the car. A day or two later, however, the bank calls, saying the check bounced. The money and car are gone.

    "They're good. They know your bank regulations better than you do," Ostroff said.

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