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BBB Warns Car Shoppers about Online Dealer Scam
July 15, 2010

For Immediate Release - July 8, 2010 - Better Business Bureau is warning car shoppers to beware of websites offering too-good-to-be-true deals on repossessed cars. BBB has heard from people across the country who thought they were buying from a reputable dealer online but were actually sending money to scammers posing as legitimate, already-established community dealerships.

 

“Because scammers essentially steal the identity and good name of real auto dealers, car shoppers will think that they’re buying a car from a reputable business,” said David Weiss, President and CEO of the Better Business Bureaus Serving Greater Cleveland. “The truth is, they’re being sold a bill of goods by a coordinated, agile and in all likelihood overseas outfit of scammers.”

 

Most recently, one Memphis auto dealer, America Auto Sales (America) (www.memphisautoworld.com), received more than 1,000 calls from consumers across the country, including a Cleveland consumer, who had shopped for a new car on www.americautosales.com thinking that it was the website of the Memphis dealership. The phony website used the name, address and contact information of the real dealer.

 

The fraudulent website claimed to sell repossessed cars at prices well below market. Buyers were instructed to wire a deposit—as much as $5,000—to an individual rather than the company, which, according to the phony website, “helps us avoid taxes legally.” The balance was to be paid upon delivery at the consumer’s address within five days.

After paying the deposit, some victims called the real dealership to arrange delivery of their car. Some customers even showed up at the lot to pick up the cars they had “bought” on the bogus site.

 

A Cleveland woman told BBB she lost over $2,000 to this scam. She found the bogus website posing as America in June while searching online for an affordable used car. She selected a 2006 Chevrolet Cobalt and was instructed by the sellers to wire $2,103 for the deposit. She told BBB, “After I wired the money by MoneyGram, I got an email saying they would contact me in 48 hours with the shipping information for my car.”

 

When she didn’t get the promised information, she went online only to discover that the website she had used was gone.  “My husband found something on the Internet about a scam down in Memphis,” she said. “I called MoneyGram and found out my money had already been picked up and I couldn’t get it back.”

 

Similar websites have posed as many different dealers in Colorado, Florida, Georgia, Michigan, New Mexico and Texas.  The websites are often taken down after a few days only to crop up shortly thereafter under a different URL address and under the auspices of another legitimate dealer.

 

BBB recommends that car shoppers look for the following red flags when shopping for a car online:

  • The prices are too good to be true.
  • The dealer only communicates through chat or e-mail—never by phone.
  • The dealer only accepts payment by money wire transfer. 

 

If you have been the victim of a fraudulent auto dealer online, notify your BBB at www.cleveland.bbb.org and the Internet Crime Center at www.ic3.gov to file a complaint.

 

 About Better Business Bureau
As the leader in advancing marketplace trust, Better Business Bureau is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. Every year, more than 65 million consumers rely on BBB Reliability Reports® and BBB Wise Giving Reports® to help them find trustworthy businesses and charities across North America. Visit www.cleveland.bbb.org  for more information.