8 Types of Auto-Related Fraud to Avoid

The Consumer Sentinel Network Data Book of 2023 listed Auto-Related Fraud as the third-highest reported category. This classification covers a variety of scams ranging from insurance fraud, windshield scams, staged accidents, odometer fraud, and beyond. The range of these scams along with the substantial financial impact creates the need for heightened awareness among consumers.

Examples of Auto-Related Fraud

Knowing the sorts of fraud committed can help individuals to avoid becoming victimized. Read below to learn about the different types of fraud surrounding automobiles.

1. Insurance Fraud: Occurs when people file bogus claims with insurance companies. It can include overstating losses or filing claims for non-existent damages.
2. Windshield Scams: Con artists approach drivers to sell them on the idea of a windshield replacement and insist that the victim sign over their right to deal with the insurance company. Then, the windshield is replaced with subpar materials while the claim is maxed out.
3. Staged Accidents: These situations involve criminals intentionally causing accidents to make it appear as though the victim is at fault. Many times, accomplices will pose as witnesses. They then file claims for damages and injuries.
4. Odometer Fraud: This entails altering a vehicle’s odometer to look as though it has fewer miles than it truly has. The intention is to increase the assumed value to gain more money in a transaction.
5. Title Washing: Scammers change a vehicle’s title to cover up information about its history, such as past accidents or flood damage. Hiding damaging facts allows them to sell the vehicle at a higher price than it would otherwise command.
6. Auto Repair Scams: Dishonest mechanics might perform unnecessary repairs, overcharge for services, or use substandard parts. They may also claim to have performed repairs that were never actually done.
7. Rental Car Scams: In this scenario, scammers pose as legitimate rental car agencies, tricking consumers into paying deposits or full rental costs upfront. Once payment is made, the scammers disappear, and the consumer is left without a rental car.
8. Online Car Sales Scams: Scammers create fake online listings for cars at very attractive prices. Once a buyer expresses interest, the scammer demands a deposit or full payment in advance, promising to deliver the car later. The car never arrives, and the scammer vanishes with the money.

Avoiding Auto-Related Scams

Recognizing an auto-related scam can save you significant time, money, and stress. Here are some tips to help you prevent potential scams:

Know Who You Are Dealing With: Be sure that you are getting services, loans, and goods from an authentic and lawful business. Multiple organizations help people research the legitimacy of a firm. For example, the Better Business Bureau.

Verify the Information: Don’t just accept information told to you. Take the steps to do your due diligence and validate the facts with research before any auto transaction.

Move Slow and Think: Scammers often use high-pressure tactics to force quick decisions. If someone insists that you need to act immediately or risk losing a great deal, take a step back and reassess the situation.

Use Trusted Payment Methods: Be wary of sellers who insist on unconventional payment methods, such as wire transfers, prepaid debit cards, or cryptocurrency. These payment methods are difficult to trace and recover.

Reporting Fraud

Reporting auto-related scams is crucial for several reasons. First, it helps authorities track and apprehend scammers, preventing them from victimizing others. Also, it contributes to data collection efforts, which can inform policies and protective measures against fraud. Finally, reporting scams can help you recover lost funds and seek justice. Below is a list of places to report.

FSU Credit Union: It is important to notify your financial institution as soon as possible if you find yourself caught in a scam. In some cases, a stop-payment action may be able to prevent the damage before it is too late.

Federal Trade Commission (FTC): The FTC collects fraud complaints and provides resources for victims. You can file a complaint online at their official website or call their consumer hotline.

National Insurance Crime Bureau (NICB): The NICB is a resource for reporting insurance fraud. They offer a toll-free hotline and an online form for submitting reports.

State Attorney General’s Office: Many states have consumer protection divisions within the Attorney General’s office. Contact them to report scams and seek assistance. (Florida State Attorney General’s Scam Hotline 1-866-9-NO-SCAM)

Better Business Bureau (BBB): The BBB tracks consumer complaints and helps mediate disputes. You can file a complaint on their website to alert others and seek resolution.

Local Law Enforcement: In cases involving significant financial loss or criminal activity, contact your local police department. Provide them with as much information as possible to aid in their investigation.

Staying informed and vigilant is key to protecting yourself from auto-related scams. By recognizing the signs of fraud and reporting suspicious activities, you can help combat these scams and contribute to a safer marketplace for everyone.