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Online Car Sales: Don't Get Scammed

Many individuals use the Internet for a variety of transactions.  Although it may be an effective tool for potential buyers and sellers, the internet can also be a haven for fraudulent actors looking to make easy money at the expense of others.

How Some Scams Work

Overpayment
In an overpayment scam, a scam artist posing as a buyer sends a bad check or money order to a legitimate seller for more than the asking price of the car, instructing the seller to pay the overage to a third party for shipping or a commission. In reality, that third party is a fake entity set up by the scam artist buyer. Because sellers are often in a hurry to finalize the vehicle’s sale, the seller will typically cash the check or money order and make the payment to the scam artist’s third party before discovering that the original check or money order was fraudulent. Victims can be bilked out of thousands of dollars.

Fake Escrow
In an escrow scam, a scam artist posing as a buyer uses a fake escrow service to hold the money for the car purchase. After the legitimate seller has signed over the title, the seller discovers that it is impossible to retrieve the funds from the escrow service. The seller is conned out of both the car and the payment for the car.

Payment Plans
In a payment plan scam, a scam artist posing as a buyer agrees to pay the seller the asking price over an extended period. The scam artist may make a small, initial payment, but eventually stops paying before the full purchase price is paid. Because individual sellers are not finance companies, they have limited options to collect from the scam artist when payments stop coming.

Identity Theft
In an identity theft scam, a scam artist posing as a buyer is not interested in the car at all, but rather in obtaining personal information from the seller. The scam artist may ask the seller for car maintenance records, bank account information, or social security numbers in an effort to obtain private information and defraud the seller.

Tips to Avoid Internet Scams

Concerns About Counterfeit Payments or Other Internet Scams?

Contact the following agencies:

Federal Bureau of Investigation
Minneapolis Office
1501 Freeway Boulevard
Brooklyn Center, MN 55430
(763) 569-8000
www.ic3.gov  (External Link) (Internet Crime Complaint Center)

Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue NW
Washington, DC 20580
(877) 382-4357
www.ftccomplaintassistant.gov

United States Secret Service
Minnesota Field Office
300 South Fourth Street, #750
Minneapolis, MN 55415
(612) 348-1800
www.secretservice.gov

Federal Deposit Insurance Corporation
FDIC Special Activities Section
550 17th Street, NW
Room F-4040
Washington, D.C. 20429
(877) 275-3342
www.fdic.gov/consumers/assistance/filecomplaint.html

Office of Minnesota Attorney General Lori Swanson
445 Minnesota Street, Suite 1400
St. Paul, MN 55101
(651) 296-3353 or (800) 657-3787
TTY: (651) 297-7206 or TTY: (800) 366-4812

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