Avoid being scammed by online dealers by following these few tips and reporting suspected fraudulent activity (age fotostock).

    by: Kevin Ransom | AOL Autos

    Call it a sad commentary on our modern world, but we’ve grown accustomed to tales of identity theft. It seems that those unwilling to woodchip their credit card receipts have a decent chance of opening up a Visa bill full of pain. A new twist on this sort of criminal activity is making its way through the used car market, however, but it doesn’t involve stealing identities from individuals. Instead, thieves are impersonating entire dealerships in order to bilk car shoppers out of too-good-to-be-true online sales.

    In June, scoundrels essentially “stole” the name of a reputable Memphis car dealer, America Auto Sales, and set up a website -- www.americautosales.com (now defunct) -- claiming to be that dealership. Then the scammers advertised “below-market prices for repossessed cars.” (America Auto Sales’ actual website is www.memphisautoworld.com and it does not sell cars over the Internet.)

    Of course, the reason the prices were so low is because the cars didn’t exist. Within weeks of the launch of the phony website, the Better Business Bureau received more than 1,500 inquires about this so-called “dealership” from consumers all over the country -- many of whom had already been bilked out of their down payments.

    The Memphis dealership itself got 1,000 calls from consumers who had shopped for a car on the bogus site, many wondering why they hadn’t yet received the vehicles they ordered, after laying out significant amounts of cash for “deposits.”

    Further investigation revealed the similar sites have also popped up, never for more than a few weeks at a time, in states such as Colorado, Florida, Georgia, Michigan, New Mexico and Texas, dating back to December 2009. But none generated nearly as much activity as the bogus site that was dishonestly posing as the Memphis dealership.

    “The people who made ‘deposits’ generally lost anywhere from $2,000 to $4,000,” says Nancy Crawford, spokesperson for the Memphis office of the Better Business Bureau.

    She said the scam is being investigated by IC3.gov -- an Internet crime tracking website that is a partnership between the FBI, the National White Collar Crime Center and Bureau of Justice Assistance. “But they’re telling us it is highly unlikely that these deposits will ever be recovered, because the criminals set it up in a way that makes it almost impossible to trace them.” One of those tactics is that it appears this scam was conducted from overseas, said Crawford.

    AOL Autos called two of the victims of this scam to ask them about their experiences with these hucksters.

    Amanda Hanson, from suburban Cleveland, has Multiple Sclerosis and is on disability. She moves with the help of a wheelchair or a walker. She has a master’s degree in microbiology, and pursued a career in that field for several years, but is now unable to work due to her condition. “I’d been driving a [Chevy] Cavalier, but with my condition, it’s hard getting in and out of a coupe, so I was looking for a sedan,” she says.

    “We decided I should buy a new car that was easier to get in and out of, and that had a trunk that was big enough for me to fold up my wheelchair and put it back there. And I found a 2006 Cobalt on this website, with 57,000 miles, selling for only $3,198.”

    Hanson did her due diligence: She researched the actual dealer, and saw that it had a good rating from the BBB, unaware that the scammers had stolen the dealer’s name and set up this bogus website.

    So Hanson sent in a deposit of $2,258, including shipping costs, and was told the car would be delivered to her home in a few days. But the crooks insisted that the deposit only be sent via MoneyGram Money Transfer, not by check and not by using a credit card. That was a key element of the scam, because MoneyGram Money transfers can be picked up anywhere in the world without the person having to show any ID or provide any identifying code, explains Crawford. So, the culprits cannot be traced.

    “They were even told to specifically use MoneyGram Money Transfer, as opposed to MoneyGram Express, which does require that whoever picks it up provide a numerical code,” says Crawford.

    Even worse, the money Hanson sent for her “deposit” was inheritance money her husband had recently received.

    “I did think it was odd that this dealer only communicated via e-mail, that we couldn’t actually call them and talk to anyone,” says Hanson. “So about five days after I sent the money, and my car still had not arrived, and I tried to log back onto their site, but couldn’t. I didn’t know it was a scam until I saw a news story on TV.”

    With Hanson’s income being restricted to her disability benefits -- and with her husband currently unemployed due to the recession -- that $2,258 represents a big financial hit. “It really was a hardship for us, to lose that money,” says Hanson. “I was very upset and angry for a few weeks, but now I have resigned myself to it. It’s a learning situation, I guess, but I am going to continue speaking out about this.”

    What those who were bilked have learned, says Crawford, is to be cognizant of these red flags when doing business with online car-sales operations:

    1. Prices that seem too good to be true.

    2. A dealer that only communicates through e-mail or online chat, and never by phone.

    3. A dealer who only accepts payment by money wire transfer.

    The second victim of this ruse that we contacted was Walt Dworschak, of Corona, California. He’s also on disability, due to his epilepsy. “I’d just gotten my driver’s license back, after not having it for a year. Prior to that, I wasn’t legally permitted to drive, because they were concerned I might have a seizure while driving,” explains Dworschak.

    “But I’d been under a neurologist’s care for a year, and he had me on a medication, and he determined that I was now seizure-free. So I was pretty excited about being able to drive again,” says Dworschak. “So my wife did a search for Carfax, and this website was the first one that came up. They listed a repossessed ’09 Ford F-150 for only $7,800. I thought, ‘That’s a great deal,’ because the low Blue Book value for that truck was $14,000.”

    Like Hanson, Dworschak did his homework, and also found that the actual dealer had high ratings. But like Hanson, he didn’t know that the grifters had essentially “stolen” the dealer’s identify. He went through the same steps as Hanson, in his case sending in a $3,000 deposit, including shipping charges. When a week had gone by and his truck still hadn’t been delivered, he called the dealer.

    “The dealer didn’t know what I was talking about, and then said, ‘Oh, you’re not one of those people who got scammed, are you?’ I said, ‘What scam?’“ recounted Dworschak.

    Losing $3,000 was also a lot of money for Dworschack, given that his income is limited to his disability benefits and his wife only works part-time. “She has a car, but needs it for work, so, I guess it will still be a long time before I’m driving again.”

    Ultimately, how does one account for the blackness in the hearts of the sort of sociopaths who would do this kind of thing to the poor and disabled?

    “That’s what’s so sad about this,” laments Crawford, “the way these scammers target people who already have limited funds. Because if someone has more financial means, they are probably not likely to go to websites to find really cheap prices on re-possessed cars.”

    The criminals in the Memphis case have not yet been brought to justice.

    If you feel you are the victim of a scam like the one described above, please contact the Better Business Bureau by clicking here.

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    1 - 20 of 104 Comments
    RKTan Feb 01, 2011 7:10 PM
    Article says..."Even worse, the money Hanson sent for her deposit was inheritance money her husband had recently received." I don't understand why that would be "even worse" considering it's inheritance money. Inheritances are basically free windfalls of cash that people are lucky to get, and really didn't earn. I think it would be much, much worse if the woman had lost hard-earned money rather than free windfall money that perhaps she wasn't even expecting in the first place. In fact, this is probably the best case scenario if you are going to lose money - to lose a windfall that you never really had to begin with.
    Report This
    tyrebitre Sep 06, 2010 8:45 PM
    " fredsnowm Aug 04, 2010 7:22 PM Note: This person is said to have a COLLEGE degree & a MASTERS at that ! This is one of the reasons I never went to College."--------------------- It also noted that the person did "due diligence" and researched the dealership . I very sincerely doubt that you didn't go to college for this reason ( or the fear it would make you "stupid' or "gullible" )..------------ " I found by the time I graduated HS. "------- You state this like it may have taken you a few extra years to get there.---------- "that so many College educated people are just so incredibly dumb with all that COLLEGE !"--------- Exactly ! College and education are lib, commie, pinko plots to make Americans stupid. It's so obvious to anyone with common sense ( which isn't ) and no education. ------------- " What's really strange about this, it seems, is that usually the higher the DEGREE, the the greater the stupidity !"------------------- Yes, it's planned that way: that way, those highly educated but incredibly stupid people will land all the high paying jobs and BE SO DAMN STUPID THEY WILL SPEND ALL THEIR MONEY ON STUPID CRAP, thereby driving the economy so the brilliant ( but uneducated ) people will have jobs.--------- " So many COLLEGE degreed people I know, think that their DEGREE grants them immunity from making mistakes & failure."--------- Has it occurred to you that perhaps all the people you know with degrees weren't particularly bright to start with, and might REALLY be dimwits without the education they do have ? Besides, why do you hang with a bunch of egotistical idiots ( and they with you ) ?
    Report This
    mttomb33 Aug 19, 2010 8:57 AM
    "Online Dealers Are Scamming Customers"????????????? THESE CROOKS ARE NOT DEALERS!! Kevin......................you're an idiot!
    Report This
    dfreedm1 Aug 18, 2010 3:00 PM
    To have a title like "Online Dealers Are Scamming Customers" is so misleading. It is the dealers who are being misrepresented by criminals. The morons who are looking to buy things for prices that are too good to be true are the ONLY reason why these predators exist. To even remotely blame a dealership or invoke people's fears of car shopping is misleading and dishonest in its own right.
    Report This
    jamesbonddesigns Aug 14, 2010 6:45 PM
    This is in Response to the Chase Credit Card purchase car above to Help People Out! James G Murphy Auctions in Washington State RIPOFF!! DO NOT DO BUSINESS WITH! I purchasde a $3000.00 Ford Taurus with my credit card.them only to Find out the car has a "Salvage" Refport & I cannot get it Licensed. The Credit card refused to Put a Fraud Sale on my Credit Card. & To My Surprise - I did a Free Public Information Report & Found No Less than 500 People been Ripped Off to! & You cannot sue them because they have a 5 page disclaimer that you need to sign that says you cannot sue them if anything is wrong with the car. Anybody can get ripped off easily by them. Washington Has No Laws to Protect you in an auction or private owner sell ( Sell with implied warranty won't cover u & even less lemon sale law)- with the "As is" Sticker... Only if you buy a car with a warranty from a dealer with and you write "Prior to Mecanical inspection" or something like that...on the contract can you "Recend the Deal" means " can get your money back" Washington State has the worst Car Laws in the World- & P.S. Attorney General or BBB is worth absolutely nothing. !
    Report This
    em4ce2000 Aug 05, 2010 10:29 AM
    And , I am not really sure how you can send that much money on a "MoneyGram". I have tried to send some money to my son - and it was only $500. I called Western Union and evidnetly it was too much money for any of my credit cards to allow - even though I have a $15,000 limit. Even for $100 they put you through the 3rd degree - just short of a blood test.
    Report This
    sphboc Aug 04, 2010 9:31 PM
    It would seem to me that any money-transfer service, concerned ********* own reputation (and not wanting the inconvenience/bad publicity associated with users' being victimized), would establish some controls prior to accepting a transfer for any "large" dollar amount. Undisputed that buyers should have demanded some verifiable documentation, on the car, first
    Report This
    tshesebe Aug 04, 2010 8:39 PM
    Anyone find it ironic that AOL is writing about this scam, yet they can't control the scam spam in the comments, like the rolex watches for sale and chanel purses? Clean up your own house AOL.
    Report This
    fredsnowm Aug 04, 2010 7:22 PM
    Note: This person is said to have a COLLEGE degree & a MASTERS at that ! This is one of the reasons I never went to College. I found by the time I graduated HS. that so many College educated people are just so incredibly dumb with all that COLLEGE ! What's really strange about this, it seems, is that usually the higher the DEGREE, the the greater the stupidity ! So many COLLEGE degreed people I know, think that their DEGREE grants them immunity from making mistakes & failure.
    Report This
    imbish05 Aug 04, 2010 7:17 PM
    1st off, I would like to say there are a few inaccuracies with this article regarding the moneygram system. MoneyGram Money Transfers do require a id or a reference code, but once the money is picked up its gone. And for amount like this a 2nd id would have been required to both send and receive it. I know this from working in a retail store that provides this service. Plus you have to tell the agent where the money is to picked up at when you fill out the form and there is a front page that tells you to NOT send the money if things sound to good to be true, if you dont know the person, etc. And MoneyGram Express is for making bill payments and for them you need a 4 digit code that routes the payment to the correct biller. I feel for these people but they should have seen the red flags before sending the money through a wire transfer. My question would be why wouldnt you have called the dealership before sending the money, since you were able to call them after you didn't recieve the car? Working in a retail store that provides this service, I have seen people get scammed many times, even after telling them that what they are doing sounds fishy, but the old the person the more likely they are to do it any way.
    Report This
    m94vette Aug 04, 2010 5:34 PM
    E-Bay use to not have AUTO CHECK unless you paid for it. Now you have to include the car fax and auto check to E-BAY. There are sellers who still try to sell cars with accidents listed in the AUTO CHECK. Look out for Mercedes-Benz for sale on E-Bay. He's located in Palm Beach Area. He will state a minor scratch when it was not. Also look out for used Mercedes-Benz used tires and wheels. He states he has a dealership but he is partners with the other seller and all they have is a storage area. Don't go by the 100% feedback. Read the feedback first. He also has people put in positive feedback before the person sees the car and ships it to them............
    Report This
    glassamps Aug 04, 2010 2:59 PM
    Even the 'real' dealers do shoddy things on the internet. I bought a 2000 Dodge Grand Caravan listed on eBay from a dealer in Seneca Falls NY purely and only because the selling dealer stated that it was inspected and passed NYS MV inspection - done by the dealer. The vehicle was brought to Maine by a vehicle transport. This vehicle when delivered had the following problems by which it could NOT have passed a valid NYS inspection. (1) gas tank leak, (2) rusted brake lines, (3) power steering hoses leaking, (4) rusted through muffler (5) structurally dangerous rust - strut towers (6) no parking brake components whatsoever (7) oil pan was rusted through at the top flange. Eleven months and $1600 in repairs, and it still cannot be driven. So beware of dealer scams, too.
    Report This
    alwerry Aug 04, 2010 2:46 PM
    Peachy5877...I neglected to offer a pat on the back for your comment...directed toward the disabled. People can be sooo nasty with their comments. I do not wish harm to anyone, however, let me just say that thinking before a person verbalizes such hateful comments might make that person appear less ignorant when it comes to anothers misfortune!! Being victimized is horrific for anyone, and when it happens to you it feels frightful and appalling.
    Report This
    mspo6250 Aug 04, 2010 2:43 PM
    When you are going to buy a car on the Internet, always have the seller fax or email a copy of the registeration and the same of title. That will probably get rid of the scammers.
    Report This
    alwerry Aug 04, 2010 2:20 PM
    I agree entirely to the comment directed to a victim on disability! As a recipient of the same , I can tell you that I would much rather BE WORKING! Even though I worked for 30+ years and paid into the system, my not working and collecting any type of disability was and is not my idea of an early retirement. Being able to work makes an individual feel they have much more self worth than having to collect from the system. Pennies, yes is about all you get in comparison. Becoming a victim because a person looks for a way to spend less for something sometimes will blind a person to a scam. When you do not think crooked, you dont often see the thievery in someone else. Because some may not be in tune with a crook doesnt make them stupid, it only makes them a little more trusting than most!! It is so easy for someone else to point the finger when they are not the victim. Be careful I say to the person who considers him or herself beyond reproach!!
    Report This
    em4ce2000 Aug 04, 2010 2:19 PM
    Yes, there are deals on the internet. I know because I have sold a couple cars that were deals. One was my father-in-laws car (he passed away). It was 5 years old but only had 15,000 miles on it. It was a focus station wagon with leather, and special mettalic paint - both pretty rare. I had to sell it to close out the estate and really did not think a Focus station wagon would have any interest on eBay - so I set the price really low. There were like 3 people fighting over it withing a few hours. Needless to say - I settled the estate the next day. In florida - (I am told) there are so many Caddilacs for sale to settle estates that you can get them for a song. (I almost bought one from the father of a neighbor whose wife had died - but my wife put the kibosh on it). So, to all you yahoos that are blaming the victims, and saying how stupid and ricdiclus it is to buy a car on the internet - you are wrong on both counts - FACT.
    Report This
    tubbed63nova Aug 04, 2010 2:15 PM
    I have seen many scams on craigslist involving seending a deposit for a car and they claim they will ship it to you. First warning look at the E-mail address if it is a g-mail not good! 2nd warning all the pictures of the car have no plates visable on the car. Third they want you to send money to some fake acount like e-bay .DAH!!! ebay has nothing to do with craigslst why would they except money for another company. Also they add is always gone that evening..
    Report This
    em4ce2000 Aug 04, 2010 2:06 PM
    I agree with Zongo. Don't bother even going to the cops - they don't care and put the paperwork at the bottom of the stack of unsolved muders, rapes, and armed robberies. Hire a good private detective (or do the work yourself)- find 'em and then cut their testicles off and hang them on your wall for a trophy. You won't have your money back, but it will make you feel better every time you sit in your chair and look at your wall. It may discurage other scammers too - course if you are caught by the cops you will go to prison for 20 years and the scammers will go free (albeit, with a slightly higher voice).
    Report This
    xfrizzlefrazzlex Aug 04, 2010 2:04 PM
    You've got to be kidding me---how can there be any people on this earth that do not know about these computer scams? Good grief---how can you not suspect something when communication is by e-mail only, down payments are only accepted through Western Union, and you aren't even seeing the vehicle that you are buying? I honestly can't feel very bad for these people. You can't tell me that you are that naiive to not see a scam when it is kicking you in the nose!!!
    Report This
    bebop423 Aug 04, 2010 2:03 PM
    I am not disabled and yet I was scammed in the exact same way. I actually used CarFAx to run the VIN# and it matched the owner and make of car being sold. In my instance the scam was VERY layered, using stolen Moneybookers, MoneyGram, Sellmycar.com and CarFax identity. I was naive in thinking that with all involved it HAD to be legit. Plus, my car price $6300 was not far off from blue book pricing. I was one of the first victims...reported it to the FBI in January 2008. Oh, and by the way......Chase who handled the transactions denied any fraud taking place. I will be contacting Chase again and ask them to finally change my situation into fraud under which I am not liable.
    Report This
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