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Classic car ads possible source of fraud |
July 16th, 2008
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By ZACH FOX - Staff Writer | Wednesday, July 16, 2008 11:04 PM PDT
Beware the bargain classic car.
Advertisements on classic car Web sites and other online sales venues and print media offer what seem to be some alluring deals: Classic cars that normally fetch prices in five figures appear for a fraction of the market rate.
Typically, would-be buyers are directed to transfer money to third-party sites; the seller then promises to deliver the car.
Experts say the scam is snaring a growing number of victims whose money vanishes and car never arrives.
Last year, consumers lost $562 million to Internet fraud generally, according to the Federal Trade Commission.
Recently, some of the bogus classic car ads have crept into newspapers.
A recent advertisement posted in the North County Times caught the eye of Bob Strange, a retired Solana Beach resident. Strange's son owns a couple of classic cars and the extremely low price for a 1963 Chevrolet Corvette intrigued him.
After contacting the seller, he was instructed to wire money into what the seller claimed was a Yahoo Finance escrow account. The problem: Yahoo does not provide any sort of escrow service, according to its Web site.
The Corvette was listed for $4,600. A similar model is posted for sale online with a $28,000 price tag ---- without an engine and all other parts needing assembly.
"I know they're all worth a lot more than $5,000, so I just pursued it a little bit because I was curious and thought, 'What the hell is going on here?' " Strange said. "It'd just be a shame if someone fell for that."
The Corvette seller, who provided a nonworking Seattle phone number, wrote Strange only to communicate via e-mail because of a hearing problem.
Fake escrow company scams have popped up across the nation over the last month, according to the Better Business Bureau.
Most of the scams involve such Web sites as Craigslist and eBay, said Michael Groch, division chief of economic crimes for the district attorney. Groch said he has not heard of the scams occurring in newspaper advertisements.
Strange said he contacted San Diego County's district attorney office, where a representative referred him to a Web site that told people how to avoid fraud.
Law enforcement officials have trouble tracking down perpetrators of similar Internet fraud cases, but noted many red flags in Strange's case, Groch said. "By the time we get a return on a search warrant, they (the perpetrators) are long gone," Groch said.
The North County Times occasionally receives classified advertisements that are clearly fraudulent, said Pam Rumer, director of classifieds for the newspaper. She said the paper "makes every effort" to screen out fraudulent ads before they appear. Among other protections, the paper reviews every ad and rejects several categories of ads outright.
Moreover, the paper requires advertisers to submit a phone number; often scammers only will leave an e-mail address to avoid being traced.
"We're probably screening out 50 to 75 percent of scam-type ads before they ever get into the paper," Rumer said. "But sometimes, they're just not detectable." The prepaid ad that drew Strange's attention included a phone number. The ad has been pulled.
Similar classified advertisements for seemingly underpriced classic cars with nonworking out-of-town phone numbers also have appeared in The San Diego Union-Tribune. Calls to the paper's classified department weren't returned.
The Better Business Bureau, a national consumer advocacy group, warned a month ago of similar cases of automobile fraud around the nation. Many involved phony escrow accounts that encouraged consumers to electronically transfer money.
Last year, consumers lost $562 million to Internet fraud, according to the Federal Trade Commission.
Anytime a seller asks for a funds to be wired to an account should be a warning sign to consumers, said Alison Preszler, a spokeswoman for the Better Business Bureau. "The biggest red flag is wiring money to someone," she said. "You should never wire money to anyone you don't know because there's no protection."
Legitimate escrow companies will typically ask for a wire to a bank account, not through a service such as Western Union. And consumers should check with state government agencies to make sure escrow companies are licensed and bonded before sending any money, the bureau advises.
Consumer advocates say other red flags for buyers include an unwillingness to meet in person or talk on the phone, a poor use of English in communication and a general e-mail account ---- such as Hotmail or Gmail ---- for supposed employees of companies.
Experts say the best way to pay for goods and services online from unknown sellers is through reliable payment services such as PayPal.
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