Car buyers and sellers warned to beware of increasing boom in internet scams
Millions of pounds are being stolen every year by criminals targeting motorists in elaborate internet scams, claim police and anti-car crime experts.
A three-fold increase in the number of reported attempts by organised gangs setting up fake money transfer or escrow companies has seen a dramatic rise in the number of ordinary drivers falling victim to conmen.
Thousands of vehicles offered at unbelievable bargain prices are being advertised on a daily basis through mainstream internet sites and motoring magazines.
Bogus sellers claim the vehicles are being offered cheap for a quick sale because of the credit crunch or because the owner has a new job overseas and the car is no use to them in another country.
In a bid to gain the trust of potential buyers the seller usually suggests using a third party shipping agent and escrow service to complete the deal – and that’s when the con takes place.
Buyers who log on to the professional looking websites and send their money in the belief it will protect them from fraud never see the cash, the car or the seller again.
Last year (2008), more than 21,000 fake advertisements were closed down by the Vehicle Safe Trading Advisory Group (VSTAG) in a crackdown on the growing menace.
“The members of VSTAG collectively blocked the publication of over 21,000 fraudulent advertisements last year which had a face value of £150 million pounds. That is three times the number of the previous year but is still only a fraction of the total,” said Adrian Black, Chairman of VSTAG.
“The problem is undoubtedly increasing but our security measures are more effective so we are identifying more of these scams before they go live.
“We believe the majority of the gangs are based in Eastern Europe, some in East Africa and in Nigeria.
“This is by far one of the biggest problems the motor industry and consumers face.
“Buyers should always get full contact details for the seller. An email address and a mobile phone number is not good enough. It’s common sense stuff but we still hear stories of people turning up with cash to meet strangers in car parks to buy cars.
“There is only one legitimate escrow company that operates with cars in the UK but thousands of fake ones. Up to 50 sites a day are being identified as fraudulent and closed down by anti-crime experts.
“It’s a very lucrative business with several people a day responding to an ad and being ripped off so, unfortunately, when one site is pulled down the gangs set up another.”
It was precisely to combat the underhand tactics of organised gangs that secure money transfer site CarPay.co.uk was launched earlier this year.
CarPay.co.uk is registered with HM Revenue and Customs and works closely with the Met Police and Escrowpolice.org.
“The criminals who target innocent motorists in this way deserve to feel the full weight of the law against them. The victims are usually people who cannot afford to lose such large amounts of money and the actions of these gangs are an affront to legitimate operators,” said Darren Gross, Commercial Director of CarPay.co.uk
“We work very closely with the authorities to root out these companies and bring them to book.
“The whole idea behind CarPay is to provide buyers and sellers with a completely secure way to do business. Both sides of the deal have to register information and prove their identity.
“It’s a completely secure system, very simple to use and it gives everybody peace of mind to be able to buy and sell with confidence.
“Sadly, incidences of fraud are rising and car buyers and sellers are right to be suspicious about exchanging often very large amounts of money and valuable machinery.”
Escrowpolice.org, which was started as a watch dog for anyone who uses escrow services online, continually updates a list of known fake companies from around the world and claims there are at least 10 scam sites on the internet for every genuine one.
“Over the past few months, there has been a surge in fake escrow sites. The bad economy may be partly to blame because while consumers have drastically cut back on luxury items, some purchases that are a necessity simply cannot be avoided,” said a spokesman for the online watchdog.
“If you desperately need to get a car and you suddenly see an advert for a good-priced car that seems to be in good condition, then you will obviously want to secure that “bargain”.
“Unfortunately, few people actually report to police that they have fallen victim to escrow fraud. This makes a difficult job in trying to trace and arrest the fraudsters more difficult.”