New and Used Auto Loan Rates
by Broderick Perkins
DeadlineNews
Group
(9/12/2011) - The Federal Bureau of Investigations (FBI) is trying to put
the skids on a growing type of cyber scam that's leaving online car buyers
fleeced of thousands of dollars and feeling run over.
Other than a home, a car is often the largest single purchase many people
complete. They are a necessity and they can be a form of discretionary
spending.
There's the practical convenience of door-to-door transit and the status
symbol trophy aspect.
But that makes being in the driver's seat a major buyer-beware issue.
Last month, another federal law enforcement agency, the Federal Trade Commission propose tougher
regulations on auto dealer loans unwittingly used by eight out of 10 car buyers.
Dealer loans too often come with kick backs that push up
the cost of the loan, but at least you get to drive something off the
lot.
Get scammed online and you'll still be walking, with a lighter
wallet.
Most auto transactions completed on the Internet go off without a
hitch.
But those that don't, according to the FBI, work like this:
On a legitimate website, the buyer finds a vehicle he or she likes, often
lured by a below-market price.
The buyer contacts the seller, usually via the email address in the
online ad, to indicate interest. The seller emails back with a hard-luck
story about why they need to sell the vehicle at a bargain price. It's a new
military tour in Afghanistan. A family tragedy. A natural disaster. Anything
to pull at your heart strings.
The seller asks the buyer to move the transaction to the website of
another online company, "for security reasons," and then offers a buyer
protection plan in the name of a major Internet company, say eBay or
Craigslist.
Through the new website, the buyer receives an invoice and is instructed
to wire the funds for the vehicle to an account somewhere. Sometimes the
criminals pose as company representatives in a live chat to reassuringly
answer the buyer's questions.
Once the buyer foolishly wires the funds, he or she is asked by the
seller to fax a receipt to show that the transaction has taken place. Then
the seller and buyer agree upon a time for the delivery of the vehicle.
Behind the scenes, what's really happening is the consumer has responded
to a phony ad or an ad hijacked from another website. The scammer moves the
buyer to a spoofed website where it's easier for the scam to move ahead. The
buyer protection plan offered as part of the deal is a bogus come-on.
The buyer is asked to fax the seller proof of the transaction so the
crooks know the funds are now ripe for the picking.
By the time the buyer realizes he or she has been scammed, the crooks
have hit the road.
While it sounds like even an imbecile wouldn't fall for such a ruse --
buying a car, site unseen and wiring money to a stranger -- the con artists
are slick.
The grifter often uses a woman's name, intending to make the seller seem
more trustworthy.
The seller cajoles his or her way into the buyer's wallet by offering a
low price, by promising to ship the car at no cost, by offering a free
protection plan through a known entity and by telling a convincing story of
woe and how the car must go.
The seller name drops promising the buyer protection, under auspices of
"eBay payment service," "the Carfax escrow service," or "Yahoo buyer
protection" -- satisfaction guaranteed. Bogus sellers also promise buyers a
week or so to decide if they like the car, after which they are promised
they can ship it back, at the seller's expense.
Yeah, right.
Remember, crooks are good at what they do because they do know how to
drive a hard bargain.
When buying a car on or offline you have to be smarter. Basic due
diligence will make it so.
• First, if it appears to good to be true, duh. Don't be rube. You
can't really buy a brand-new Mercedes for $12,000? Snap out of it.
• Forget email transactions. Establish telephone contact with the
buyer or seller and determine where the car is located. Demand to inspect
the car, and you always should, including having a trusted mechanic give it
the once over. Ask if the title is clear. Demand to see the title.
• If you do purchase through an escrow company deposit, again, due
diligence. Make sure the escrow company is properly licensed. Call them and
speak to a representative. If you are redirected to another Web site, visit
it directly, not through a link sent to you by the seller. C'mon. Use your
head.
• Never give out private, financial or personal information (Social
Security number, credit card number or bank account information) until you
verify that the online escrow company you are using is legitimate.
• When a seller insists on using a particular online escrow company,
hit the brakes. They could be trying to steer you toward a fraudulent
service site. Send the escrow company an e-mail question. If you don't
receive a response, don't do business with them.
• Be on the look out for sloppy online content, spelling or grammatical
errors.
• Be aware of sellers that want you to use person-to-person money
transfer services like Western Union or MoneyGram or direct you to send a
payment direct to an individual. Legit escrow companies don't.
• Fake escrow company sites often display logos from the Better
Business Bureau, VeriSign Secure, TRUSTe, and even the Internet Fraud
Complaint Center. Avoid escrow company sites with domain names ending in
.org, .biz, .cc, .info or .US and web sites that designate foreign origin.
Many of the scams are overseas operations. Again, due diligence. Do your
homework. Check to make sure the escrow company really is endorsed by these
organizations.
Other related articles:
High MPGs and low auto loan rates can save you thousands of dollars
Research your options when shopping for an auto loan
Shop
harder for loans for gas-sipping used cars
How to drive a
hard auto loan bargain
Special
Report: Hitting the Brakes on Auto Dealer Loans
Get a
CLUE about your home and auto insurance claims
Steer clear
of car title loans
Driving a
hard bargain on car insurance
