By on April 22, 2009

After yesterday’s post on rip-offs on autotrader.ca, I looked into the Internet used car sales fraud deal. It’s a BIG deal. The industry estimates that some twenty-two million used cars were sold online last year. According to a recent FBI report, the number of complaints the agency received re: Internet fraud rose 33.1 percent during the same period, representing a $265 million loss. Yes, well, that’s the reported figure. No one knows the actual size of the car classified rip-off problem and which way it’s trending (to use the proper verbization). The companies who provide the websites where these shady deals go down ain’t gonna to fill in that blank, now are they? Autotrader.com spokesman Mark Scott wouldn’t disclose the number of fraud tips sent to them by aggrieved/suspicious users. But he claims his employer investigates all leads within an hour of receipt.

Scott said Autotrader regularly shares fraud info with rival listing orgs, including discussions about the efficacy of their filtering and fraud detection software (whose parameters remain a closely guarded secret). Scott and his colleagues from eBay, cars.com, edmunds, mota.com, Pep Boys and Craigslist are heading off for the Petersen Museum for tomorrow’s “Fraud Abatement through Industry Response” (FAIR) summit. There will be a public panel discussion, followed by a closed door pow-wow. (If any members of our Best and Brightest can cover this event for us, please contact me at robertfarago1@gmail.com).

As for the caveat emptor side of the equation, Scott is down with our previous poster’s guidelines. “Do your research. If it sounds too good to be true, it is. If you can’t talk to the seller by telephone before purchase, don’t do it. And never click on a link within an email; it can take you to a fake version of a real site.” Clever bastards.

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17 Comments on “Internet Private Party Car Sales Sites Head for CA Public Fraud Summit...”


  • avatar
    menno

    I’m looking at the idea of getting a (low-budget, unfortunately) future-collectible car and have been perusing those very websites for some while now. I keep having “wow, that looks good – oh, dang” moments, while looking.

    Ultimately, it’s the loss of confidence in the trustworthyness of ANYONE ELSE which is spelling the end of the monetary systems worldwide.

    Call it the “greater fool” principle.

    http://www.freebuck.com/articles/lwilson/090416lwilson.htm

    If everyone is “on the take” to “screw the next guy” and nobody trusts anybody any more on any business deal, whether large or small, then everything will simply grind to a halt, eventually.

    In the interim time, when lawlessness abounds and nobody seems to be able to stop it, that period of time slowly devolves into chaos and anarchy.

    On a more positive note, hey B&B! What about these cars? As ‘future collectibles’?

    Please, give me your thoughts.

    I want a sort of a modern-day equivalent of a 1962-1964 Studebaker Gran Turismo Hawk. A grand tourer, preferably coupe but sedan is fine too.
    It won’t see more than 3000 miles a year, and no rain or snow. I prefer having air bags (mostly because of the sucky drivers which seem to surround me where I live).

    Early 1990′s BMW 5 series sedan.

    Late 1980′s/early 1990′s BMW 735 sedan.

    Late 1970′s/early 1980′s Mercedes 300D sedan.

    Late 1970′s Porsche 924 or 944 coupe.

    Early 1990′s Mercedes 300CE coupe.

    Early 1990′s Lexus SC300 and SC400 coupe.

    Early 1990′s Acura Legend coupe.

  • avatar
    1996MEdition

    How does this compare to the fraud that occurs every day on used dealer lots? New dealer lots? The local paper or Trader mags?

    edit – I mean in numbers (%’s)

  • avatar
    dean

    Well, on a used car dealer lot at least you get the car. It may be mis-represented, may have a rolled odo, may be a salvage passed off as a decent car, but at least you drive off with something for your cash.

  • avatar
    jkross22

    Good points.. you can’t be too careful. OTOH, even if you buy from a dealer, you can’t really trust the pictures either.

    When we bought a used XC90 from a dealer in Michigan in ’07, the shipping company faxed me their report of the condition of the Volvo. They noted the SUV had a bunch of marks on the hood signifying paint damage. When I asked the dealer about this, they said the shipping company was just being anal and that the hood was fine.

    When I received the Volvo, it was pretty obvious the dealer did a horrible job of trying to make paint damage look presentable in pictures. I called the dealer and of course they claimed it must have occurred in shipping. Then they offered to sell me touch up paint…

    Stay classy, Crest Volvo (Macomb, MI).

  • avatar
    jpcavanaugh

    Menno, sounds like you are in for some serious fun here. Howabout a late 80s-early 90s Linclon Mark VII LSC with the HO 5.0. Or the same era Thunderbird Super Coupe or Taurus SHO. Also, an 80s BMW 6 series coupe was a mighty pretty car, but I suspect they are kinda pricey. Finally, I’m not much of a GM guy, but wasn’t there a supercharged Riviera in the 90s?
    But of those on your list, I would vote for the SC400 or the 735.
    Good Luck and enjoy!

  • avatar
    NickR

    But he claims his employer investigates all leads within an hour of receipt.

    Suuuuure. I contacted trader.ca about fraudulent listings and never heard a peep back from them. And some of the obviously fraudulent listings have been hanging around for weeks.

    And I will second Robert’s appeal for someone to go this if they are nearby (and can get in).

  • avatar
    50merc

    “I want a sort of a modern-day equivalent of a 1962-1964 Studebaker Gran Turismo Hawk.”

    Hey, I want the real thing! But it’s way too late to buy one of those artworks cheap.

    I like JPCavanaugh’s suggestions, especially the eighth-generation Riviera. A supercharger was an option for 95 – 97; standard for ’98 and ’99. Quite a peppy and elegant car, and 27 mpg highway. A dealer in OKC has a nice ’98 (but 141K miles) listed at $5,995.

    You might want to have a professional watch the auctions for you as your agent. Steven Lang offers that service, but Atlanta is a long way from Michigan.

  • avatar

    NickR–

    I work with Mark Scott over at AutoTrader.com, and just want to clarify one thing: we’re not connected in any way, shape or form with Trader.ca, or any Canadian listing site, for that matter. So, we do actually stick by the hour time-frame.

    Hope that clears up the confusion!

    Brian Gluckman
    Manager, Media Relations
    AutoTrader.com

  • avatar
    menno

    jp, 50merc, thanks for the kind words. Yeah, I’m having fun / biting my nails at the same time.

    I’m definitely going to want to see the car before buying. I had a buddy who bought a car through eBay from a PA dealer sight unseen and had it shipped…. gives me shivers thinking about it.

    Then there was my ill-fated attempt to sell my Corvair over eBay where I had 25 different (or the same guy?) fake ads out there – they’d stolen my ad, my photos, everything to try to rip people off. eBay didn’t even respond to me.

    Unfortunately the BMW is near Chicago. I wasted (or, alternately had a fun day of driving and hang time) with my buddy for over 10 hours going to Lansing then Detroit area last Saturday to see an Acura (“gone! sold it yesterday”) and a 300CE (whoops, 9/10 body – bad engine and trans).

    I’m even contemplating flying to Chicago and renting a car to go see a BMW 5-series in a suburb, at a dealer.

    The 7-series cars seemed to have dried up (except for V12′s and all of my car-pal friends are essentially telling me to be “skeered” and run away with my ass-hairs on fire at even the THOUGHT of getting one of those…. hyper expensive in upkeep, etc).

    BTW I bought a batch of 10 Carfax checks (used up 6 already in less than a week) and these are helpful. Don’t bother with carfax if the car you are looking at is 1980 or older; it won’t work. Carfax requires a 17-digit standardized international VIN number and these started – all over the world, literally – for the 1981 model year.

    I considered the Buick Riviera for about 1/1000th of a second and scratched it because I have become “allergic” to anything GM or Chrysler over the past 35 years. I also considered a Reatta for 1/2000th of a second, and a proper, older Aurora for about the same.

    Pass. I’ll take my chances with hyper-expensive parts (my pal is a certified body man and mechanic, plus he’s a german car afficianado). He’s lately given up on anything except Hyundai and Ford. He won’t be buying German cars any more. A used Mercedes SUV did it for him…. His wife runs a beautiful Tiburon.

  • avatar
    dolorean23

    I bought my ’95 Mustang Cobra with the convertible soft and hardtop option, the only year Mustang offered it, for a real nice price on AutoTrader.com back in 2004. Prior to signing anything, my wife drove up to Iowa to inspect it, test drive it, and finally drive it home. Its been a great car and I’ve had nothing but fun with it.

    For additions to your list, and may I suggest all should be manuals (gotta row it yourself):

    ’98-00 Ford Contour SVT
    ’94-95 Nissan 300ZX twin turbo coupe
    ’00-03 BMW M3 coupe
    ’86-88 Audi Quattro hatch
    ’87-89 VW Scirocco GT
    ’00-02 Honda Prelude Si

  • avatar
    NickR

    I think the last gen Supra would be a good choice if you can find one that hasn’t been modded/flogged to death.

    On a different note – Mr Gluckman, I apologize for the inference.

  • avatar

    Menno,

    There’s that Subaru coupe from the mid-late ’80s, I think, whose name escapes me, but it is one unusual car.
    I’d add the Honda CRX to your list, if it’s not too downmarket for you.
    Honda S2000

    I have several others, but they are definitely not in the Stude GT Hawk class:

    Early to mid-90s Chevy Caprice
    Volvo 940 wagon. I love this one. I think it’s the best of the boxy Volvos.
    Generation 1 Saturn SL2

    On your list, I’d scratch the Legend. I like especially the 300CE and the Porsches.

    ah, shoot, I’ve got to go back to work.

  • avatar
    Domestic Hearse

    So I go on eBay a few months ago, see a great 911 in Michigan. An early 80s SC with 20k original, documented miles. Call the guy. We chat for awhile. Not a dealer. Private owner. Knows his stuff – obvious he is intimate with the car.

    I’m pretty interested. Price is pretty steep. I’ll wait and see….

    Later that week, I’m on the above-mentioned Autotrader.com. I see the SAME 911. Same exact photos. Same exact description, except, it’s got an Illinois phone number, different email add’y and a price 10,000 lower.

    What!?

    So I call the number from the Autotrader ad. Leave a VM. This is weird. Then I send an email to the add’y in the Autotrader ad. Bam. Instant response. Send me a 5000 down payment via Western Union and I’ll hold the car for you. Bring the balance when you come to pick it up.

    Whoa. This deal smells funny.

    So I call back the first guy — the real owner in Michigan. I give him the Autotrader car listing information and tell him someone’s selling your car on a different site, and it’s completely bogus.

    Five minutes later he calls back pretty flustered. Yep, someone copied his photos, and created an entirely bogus listing on a different website. An e-thief was laying in wait for someone who would fall for the “best 911 deal ever!”

    Both the real owner and I sent an alert to Autotrader, and a couple days later, it was gone.

    I also called my local police, gave them the email address and the phone number. But they said they’d probably do nothing with the tip. By the time they passed it off to the Illinois State Police or local cops downstate, the crook will have tossed the one-time-use cell phone and would stop using the bogus internet address.

    B&B, this is just one personal experience. The cops won’t/can’t do anything, and all this “secret cheater detection sauce” the websites blather on about is hooey. The fact is, online car cheats are everywhere because it works. People are falling over themselves because they’re finding that GTO, or Chevelle, or Shelby Cobra, or M-series at an unfreakinbelievable price….just send a deposit to hold it, then come get it.

    And poof. Money’s gone. Cheaters are gone. And the cops shake their heads…there aren’t enough resources to help out every swindled e-buyer.

    There’s no shortcut to shoe leather when it comes to getting your dream car. You MUST go see it, inspect it (or have it looked over by a third party), perform due diligence and verify the seller, or better, look him in the eye and negotiate in person. Then have him put those keys in your hand and walk you to your new dream car.

  • avatar
    stevelovescars

    As to the depreciated future collector car, I woud second the thought about finding a clean 633 or 635 BMW… if you can find a clean one with a manual transmission even better as those seem to be the ones to have. I’ve always liked the styling and they haven’t really started to appreciate in value yet.

    I’ve also owned a 1984 Porsche 911 Carrera (3.2). Those ’84 to ’89 models are very usable daily drivers and very reliable and well built. They appear to be at the bottom of their depreciation curve as well.

    I have a ’94 E320 Cabriolet (shares a lot of parts with the CE coupe you mention). Very well built cars with a few well known weak spots that have probably been fixed by now. The 124 chassis’ final development cycle was the 320 from ’94 and ’95 and the coupes are dirt cheap. Convertibles are a bit more but they cost an absurd $85k when new back in the day.

  • avatar
    stevelovescars

    As for the fraud comments, it seems to me that most of the cases are pretty obvious and fall into a few tactics:

    Wire me the money… yeah, the car is supposedly in New Jersey, but I’m traveling out of the country so I can’t show the car and this explains why the money is being wired to a bank in Romania. RUN AWAY immediately.

    The car exists, but it’s grossly worse than described.

    Here’s another funny one: wire me the money… the car is being held by eBay’s warehouse and is covered by their purchase protection program even though you found it on Craigslist. RUN AWAY… eBay’s coverage only applies to vehicles purchased on eBay (winning an auction or Buy It Now).

    Either of these issues can be dealt with in advance. First, definitely try to talk to the buyer. Ask specific questions. Ask for additional photos. Ask for a photo copy of the front of the title if applicable.

    If you can’t see the car before buying it, get an inspection… eBay offers simple ones through a partner on their site for $99. It won’t confirm that the numbers match on a ’57 Chevy Fuelie but will confirm that the car exists and is in the basic condition promised in the listing. More detailed inspections are available from professionals who advertise online.

    Good Story: I sold an really nice MG from my home in CA to a buyer in Maine on eBay a couple of years ago. I spoke with the buyer by phone and was happy to answer his questions. He had the car inspected by a British Car specialist in my area for about $100 (I took it there for him). I had the check FedExed to the following day after it checked out as described.

    Another friend was looking for a late-model Bentley. He found one online that looked nice. I suggested an inspection (he hadn’t thought of that). He paid $350 to have someone knowledgable about Bentleys go look at the car in person (at a dealership in Houston). That $350 probably saved him $30k in repairs.

    If the seller won’t allow an inspection walk away and find another one… even if you don’t intend to get one, ask the question to see how they react. Alternatively, buy a cheap plane ticket and fly to see the car when you hand over the check.

  • avatar

    NickR–

    No worries–happens all the time, actually.

    David H–

    I think you’re thinking of the Subaru SVX. I randomly saw one on my way in this morning. Most famous for the bizarre window-within-a-window treatment that allowed drivers to go triple digits in a blinding rainstorm with the windows down without getting wet. Actually, as Grand Touring coupes go, they’re excellent.

    Another suggestion, on the sedan side: Jaguar XJR from the X308 generation (1998 – 2003), which had the supercharged V8. Great power, reasonable fuel economy (for 377 hp), and the later you go in the series, the more reliable they get.

    Good luck!
    -Brian

  • avatar
    menno

    Yes, the SVX was the very car I saw at a used car lot just after I broomed my Corvair 2 years ago, and which got the gears slowly rotating re: getting another “toy”.

    I had a somewhat likeable 1994 BMW 525i at a dealer south of Chicago, mulled it over, decided that 115,000 miles was not bad for a 15 year old car, called the dealer and – gee what a surprise, it was gone.

    These dealers are not doing themselves any good by leaving ads of cars on these websites which are sold already.

    I’m pretty aware of all of the rip-offs online; trust me, I’ll be wanting to put my hands on the very car and title before parting with any hard earned dough-rey-me.

    This is partly my problem; living in northern Michigan means there aren’t any decent cars like this available. Nearest “big” markets are Grand Rapids (several hours away), Chicago (several hours even farther away) and metro Detroit (5 hours in a different direction from home).

    Pals of mine are suggesting buying a car sight-unseen (after hiring an inspection of it) and having it shipped to me from the west coast. I’m dubious, a bit. Thoughts?


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