Better Business Bureau update to Virtual Vehicle Study: Be careful when buying a vehicle online

Looking to buy a vehicle online? Be wary. While legitimate sellers use modern technologies to simplify the car-buying process, fraudsters use similar technology to carry out elaborate impostor scams.

Since Better Business Bureau (BBB) International Investigations Initiative issued a 2020 study, Virtual Vehicle Vendor Scams: BBB Study Reveals a Growing Scam Using Fake Cars and Escrow Companies to Steal from Unwitting Consumers, fraudsters have come up with new ways to entangle consumers. A look-back at reports to BBB since 2020 finds scammers still list non-existing vehicles of all kinds on real online marketplaces, but increasingly use fake websites, target high-end buyers of rare classic cars and exploit vehicle history reports to steal money and information.

Source: BBB Scam Tracker: 2021-2023

Online vehicle vendor scam reports to BBB Scam Tracker dropped in 2022 but rose in 2023. Consumers looking to buy a vehicle are at risk of encountering fake vehicle listings and fraudulent vehicle reports across various websites and social media platforms, according to BBB Scam Tracker data from the last three years.

Buyers aged 45 and above accounted for over three-quarters of all reports on virtual vehicle vendor scams filed with BBB Scam Tracker. Online purchases, including car sales, are one of the scam types most likely to result in a loss of money, according to BBB Institute for Marketplace Trust research, further indicating the need for caution when searching for a vehicle online.

This fraud took off across North America during the pandemic, when limited in-person contact was encouraged. One study using FTC data determined that only 4.8% of victims of mass market fraud ever report to BBB or a government entity, meaning the number of cases reported is likely an undercount.

Peter, in Friendswood, Texas, told BBB he found a 1972 Dodge Challenger on an online marketplace in June 2023 for about $26,000. Believing it to be a good price, he jumped on the deal and reached out to the seller. The supposed seller, Dawn Perez, told Peter the car would be shipped to him, and there would be a 7-day trial period to ensure he was happy with the purchase.

“He sent me a lot of pics of the car and description. He told me car is in great shape, no issues,” Peter told BBB.

Instructed to send payment to an escrow company, Peter followed the seller’s directions. The car never arrived, and he soon realized he had been scammed.

Scammers, using the same format described in the 2020 BBB study, appear to be targeting classic car sales. Seeking big paydays, they list non-existent vehicles online for delivery, sometimes using a real Vehicle Identification Number (VIN), pictures and imitations of legitimate sellers’ websites.

A relatively recent trend has emerged, as buyers have become well acquainted with different tools to research products – including cars, trucks and recreational vehicles. Scammers now strike during the research phase of the vehicle buying process, creating fake “vehicle history” lookup websites meant to steal money, and sometimes consumers’ personal information. In 2023, reports of this type to BBB Scam Tracker increased by nearly 30%.

Susan in Lynn, Massachusetts, explained to BBB that she realized she had been duped in November 2023 while searching for vehicle information online. “I wanted to look up a vehicle history, was promised no subscription. One report is $1.” Her purchase ended up being more costly. “But they charged $29.95 right away.”

Last year, BBB Scam Tracker received more than 150 reports about vehicle history scams. In many cases, consumers encountered the scam through an online vehicle listing.

Scammers frequently told potential buyers well-known vehicle history sites were missing vital information, urging them to instead use a specific site. Many consumers, like Susan, who complied with the request, struggle to shake off the scammers.

“There is another website listed on my credit card receipt, which looks like the same scam,” she told BBB, referring to an unauthorized charge she found on a credit card statement.

BBB Tip: If you shared your credit card information with a scammer, BBB recommends you contact your credit card company immediately.

How do online car buyers get scammed?

The fraud starts when a consumer looks for a vehicle online. They may find too-good-to-be-true listings on real sites like eBay and Craigslist. While those sites remained popular in 2023, scammers increased use of social media sites like Instagram.

Fraudsters pose as private sellers or dealerships, using stolen pictures, fake addresses and elaborate stories to explain overly cheap prices. Sometimes, they even co-opt real dealership or seller names and locations.

Additionally, scammers may ask the buyer to use a fake escrow company to hold the money while the vehicle is supposedly shipped to the buyer for evaluation with an option to return the vehicle if they aren’t happy with it. In reality, the scammer controls the escrow company, so once the money is received, they disappear or give excuses for why the non-existent vehicle never arrives. Eventually, the fake escrow website also disappears.

In 2023, Melissa from Olympia, Washington responded to an ad on a legitimate vehicle sale website for a $15,500 Airstream trailer, a popular model in recent years. The seller said they were dealing with a health issue and needed to unload the camper to pay for unexpected bills.

“He said he was using a consignment business that he had used since 2017. I paid through the consignment business website which looked official, and I could not find anything online saying that company was fraudulent. The trailer was supposed to be delivered to my house,” she told BBB.

As Melissa waited, the delivery date kept being pushed back. One day, she was told the trailer was damaged on its way to being delivered, and she would receive an insurance payment instead. Months later, there was still no money.

“I was scammed, since I still have not received a refund,” she said.

At least two other reports to BBB Scam Tracker involved Airstream trailers. Other reports describe how scammers use any type of vehicle – cars, boats, motorcycles, trailers, motorhomes or even yard/farm equipment – to lure buyers.

Source: FTC Consumer Sentinel Data – 2021-2023. The Federal Trade Commission’s Consumer Sentinel Data is comprised of complaints related to the purchase of new and used auto sales and scam reports about online vehicle sales

Helen Clark, an attorney with the FTC that specializes in auto scams, said the organization has seen auto sale scams continue to increase.

“The pandemic really allowed online auto scams to take on a new life,” she told BBB. “These issues are on the rise and on our minds.”

In April of 2023, Dennis in Elton, Pennsylvania found an ad for a tractor on Facebook. After talking with the seller, Dennis wired $45,000 to an escrow account he believed was independent of the seller.

“The tractor never showed up when he said it would be here. I got suspicious and asked for the return of my money,” Dennis said. “(The seller) said it would be totally refunded in 24 hours. I never got the money.”

In both cases, neither buyer saw the vehicles before they paid which are hallmarks of virtual vehicle vendor scams.

BBB Tip: Ask to see a vehicle in person before you agree to purchase.

Scammers target classic car buyers, prey on scarcity

Source: BBB Scam Tracker: 2021-2023

While BBB Scam Tracker data shows virtual vehicle vendor scams have held steady since the 2020 study was published, scammers in 2023 did appear to turn toward a new avenue to ensnare consumers: classic cars.

BBB Scam Tracker reports from across North America included a similar type of vehicle fraud. Buyers interested in classic cars found what they thought was a well-reviewed dealer selling vintage vehicles, but what they had stumbled upon was a scammer impersonating a classic car dealer. One business owner laid out how his company’s brand was hijacked.

Doug, a car seller from Longwood, Pennsylvania, told BBB he started getting reports about non-delivery of cars. He looked into it and found a nearly identical website to his own. It had a similar URL (only missing the letter “s” from the end), the same address and contact information as his business and even pictures of his cars. The only difference was the unusually low prices of the cars.

“It is a very professional looking website, but completely fictitious, and hosted out of Lithuania,” he said. “Don’t send these guys any money as you will never see it again.”

BBB’s 2020 virtual vehicle vendor scam study found scammers were primarily located in Romania. A series of arrests have been made over the years, but the scam has continued.

BBB Serving Greater Cleveland issued a warning to the public about a similar scam in their region, where scammers posed as a shuttered vintage car seller in the area. Their website used pictures stolen from other legitimate sellers, and many fell for the fraud and sent tens of thousands of dollars to the fraudsters

BBB Tips:

• Whenever possible, use a credit card for online purchases
• If personal information is stolen, run a credit check for fraudulent activity
• Freeze your credit if your social security number appears to be compromised

While virtual vehicle vendor scams tend to rely on escrow accounts for payment, Clark with the FTC urged consumers to never send money to someone they don’t know over a payment service either like Venmo, Zelle or CashApp.

“Continue to be wary, especially of payment apps,” Clark said. “Even when someone is asking for a payment in an app that you are comfortable with, the money could be as good as gone once it is sent.”

Brian Moody, executive editor at Autotrader, suggests buyers can follow a simple hierarchy when buying cars.

• Buy local and view the car in person
• Look for franchised dealerships or licensed sellers online
• In the case of rare vehicle purchases, shop online but use a service with buyer protections

“Treat this as you would any serious financial transaction,” he said. “You wouldn’t go up to a house and simply say, ok this is good, where do I pay?” Moody said.

BBB Tip: Verify the identity of a seller independently, if possible

Fake vehicle VIN report websites: Who can you trust?

Online vehicle vendor fraud typically catches customers at the time of purchase; however, scammers have tried to steal from buyers even earlier in the process through an unusual method: fake vehicle identification number (VIN) reports.

In this instance, fraudsters target the part of the car buying process that leverages a consumer’s desire to make a wise purchase and protect the vehicle. They create a fake website that claims to operate like Carfax, a legitimate service used to aggregate accident reports and other information about vehicles. The scammers claim their preferred websites contain additional information. But they own the websites, and they steal both money and sensitive personal information from consumers who use them.

Fake vehicle report websites began popping up as early as 2018, but many people are unaware of them. BBB Scam Tracker data, reports to BBBs and news stories throughout the United States and Canada show fake “VIN search” websites rose in 2023.

An analysis of BBB Scam Tracker report data revealed connections between several fraudulent websites.

A group of websites, all registered under the same domain name server, featured similar URLs and names. Examples included “Check Auto Status,” “Check Motorcycle Info,” “Digital Title Check,” and “Check Title Status.”

While registration with the same domain name server (DNS) is not definitive evidence of connection between websites, further investigation found a phone number linked to at least 13 other websites with names like “VIN Summary Report,” “Carfax Line,” and “Vehicle Summary.” These sites all used nearly identical design and language and offered the same services. This tactic is common across all types of virtual vehicle vendor sales, such as fake escrow sites.

None of the websites are listed on the National Motor Vehicle Title Information System’s publicly approved VIN lookup websites. The Insurance Bureau of Canada provides a list of approved websites as well for consumers to verify VIN information.

As with other scams, when one website is taken down, fraudsters activate new ones that are nearly identical.

Fake history reports and vehicle websites highlight the need for consumers to be cautious during the earliest part of the buying process. Other prospective buyers found themselves encountering scams in which supposed vehicle sellers pressured consumers to use an unknown “VIN checker” or “vehicle report site.”

In many cases, these websites use fake history reports as another way to apply high-pressure tactics. They tell potential buyers they must purchase a vehicle report from their preferred service quickly, because the fake car being offered for a too-good-to-be-true price will sell fast. In others, the scammer provides a link to a fake report site with prices much lower than others.

In November 2023, Rosemarie in New Haven, Connecticut, told BBB she found a website through a search engine when she was looking up information on a used car. She read that the vehicle report would only cost $1, much cheaper than others, so she entered her credit card information. Her card was charged for months without ever receiving a report.

“They took out $1, plus they took out another $29.95, plus another $4.95,” she told BBB. “Then, they sent an email saying I’m going to be charged $30 every two weeks.”

These websites often have phone numbers to provide an air of legitimacy. Many consumers who called the numbers and got no answer or a dial tone soon realized it was a fraud.

Bart from Sebastopol, California, told BBB, “When I try to call them directly, they said to press a button for the operator. There is none, just a recording to leave a message. Left a message, and never heard from them!”

Even consumers selling motorhomes encountered the fake history report scam. Ralph in Hailey, Idaho, told BBB he was selling a motorhome, when a potential buyer named “James” reached out. The man asked Ralph to purchase a $39 “audit” on the RV. Ralph had a Carfax report already, but the scammer said, “he did not trust it” and provided his own site.

Ralph paid for the report, and “James” said they would come the next day to check out the RV, but he never showed up.

“I then realized I had been scammed and that James now had my personal information, name, address, phone number, and CC number. I have since canceled my credit card. I cannot believe I fell for this one,” Ralph said.

Brian Moody at Autotrader said buyers should treat vehicle purchases like any other big-ticket item. Due diligence is needed, and buyers should not rush into a sale, no matter how good a deal looks.

“A person that appears to be in too big of a rush and can’t take a few moments for peace of mind — that’s a red flag,” Moody said.

BBB Tip: Sellers should never purchase a history report for their own vehicle to finalize a sale.

Know the red flags of an online car buying scam:

• The price is significantly below market value
• Owner cites an overly personal reason they need to get rid of a vehicle
• A buyer asks for a specific unfamiliar vehicle report and will not accept reports you have already pulled
• A car seller will not allow you to see the vehicle and insists upon vehicle delivery
• Money must be sent to a third-party recommended by seller

BBB tips to avoid falling for an online car buying scam:

• Use only approved Vehicle Identification Number (VIN) lookup websites
• Do not purchase a vehicle report for an interested buyer
• View a vehicle in-person
• Be wary of too-good-to-be-true prices
• Pick up a vehicle yourself whenever possible
• Resist high-pressure tactics urging quick action