Fraud Surrounding Auto Purchases

Anytime a transaction takes place, there is the possibility of fraud. Criminals are working to perfect schemes to take what’s not theirs, whether through a bunch of small transactions or a few large ones. Car buying is no different. Shoppers need to be extra vigilant surrounding a hefty purchase. Anytime more money is on the line, there is more paperwork, more people involved in the transaction, and more moving parts.

Purchasing an automobile is the second most expensive purchase that most Americans make, behind buying a home. There are several types of fraud to be aware of when you get your next vehicle. Knowing where the dangers lie is helpful to protect yourself from pitfalls. Below is a list of types of fraud to keep an eye out for when making an auto purchase.

Types of Vehicle Fraud

1. Title Washing: This involves altering a vehicle’s title to conceal its true history, often to remove information about salvage, flood damage, or other issues.
2. Odometer Rollback: This occurs when the mileage on a vehicle is tampered with to make it appear as if the car has been driven less than it has.
3. Salvage Fraud: Some unscrupulous sellers might sell vehicles that have been declared a total loss by insurance companies due to extensive damage.
4. VIN Cloning: This involves taking the Vehicle Identification Number (VIN) from a legitimate vehicle and placing it on a stolen or salvaged car to give it a false identity.
5. Title Fraud: This can involve various schemes, like forging a title’s signature, to gain vehicle ownership illegally.
6. Financing Scams: This can include practices like inflating the price of the car, adding unnecessary fees, or offering misleading financing terms.
7. Hidden Damage: Sellers may not disclose previous accidents or damage to a vehicle, which could affect its safety and value.
8. False Advertising: Misleading claims about a vehicle’s condition, features, or history can be used to lure buyers.
9. Online Scams: This includes fraudulent listings on online marketplaces, where the seller may not even possess the vehicle they’re advertising.
10. Stolen Vehicle Sales: Criminals might attempt to sell stolen cars to unsuspecting buyers.

Protecting Your Purchase

These days, it is up to consumers to safeguard themselves as much as possible from the snares of fraud. One of the most effective and easiest things you can do to defend yourself is to beef up your knowledge. Reading articles like this one is a great start to understanding where the pitfalls may lie. Below are some tips to protect yourself.

1. Educate Yourself: Gather information about the specific make and model of the car you’re interested in, its market value, and the common issues associated with it.
2. Verify the Seller: Deal with reputable dealerships, or if buying from a private seller, meet in a safe, public location and ask for identification.
3. Request Vehicle History Report: Obtain a comprehensive report that details the vehicle’s history, including accidents, title information, and ownership history.
4. Get a Pre-Purchase Inspection: Hire a trusted mechanic to thoroughly inspect the vehicle, looking for hidden issues or potential problems.
5. Check the Title: Ensure the title is clean and properly transferred. Be wary of salvage or rebuilt titles, as they could indicate significant prior damage.
6. Review VIN and Odometer: Verify that the Vehicle Identification Number (VIN) on the dashboard matches the one on the title and other documents. Check for any inconsistencies in reported mileage.
7. Avoid Wire Transfers: Be cautious of sellers who insist on using only wire transfers for payment. Consider using a secure method like a cashier’s check or escrow service.
8. Beware of Online Scams: Be skeptical of deals that seem too good to be true, especially if offered through online marketplaces.
9. Read the Contract Carefully: Ensure you understand all terms and conditions before signing any documents. Don’t be afraid to ask questions about points you may not understand.
10. Move at a Comfortable Pace: Don’t let anyone bully you with a high-pressure sales strategy. It is a tactic designed to push you into making a quick decision. Take the time to think everything through.
11. Ask for Original Documents: Insist on seeing original copies of important documents like the title, maintenance records, and owner’s manual.
12. Protect Personal Information: Be cautious about sharing sensitive information like your social security number or financial details with the seller.
13. Report Suspected Fraud: If you suspect any fraudulent activity during the transaction, report it to the appropriate authorities and seek legal advice if necessary. You could help others stay safe with your actions.
14. Listen to your gut: If something doesn’t seem right, have the courage to walk away. There are other deals to be had.

Due diligence can be time-consuming, but it is worth the effort. There are ways to save on some of that time and hassle. iDrive is a free car-buying concierge service available to FSU Credit Union members. This membership perk is designed to simplify the cumbersome task of auto shopping.

Action Steps for Victims

If you or someone you know has been a victim of fraud, you must report it. The authorities are working tirelessly against fraud, and any information you give is helpful. Here are some ways to reach out to make a statement.

• Verify if a business is licensed, insured, or has any complaints by going to My Florida License and the Better Business Bureau.
• Contact your local authorities.
• Floridians can report a scam to the Office of Jimmy Patronis, the CFO of Florida, at Fraud Free Florida.
• Report fraud to the Federal Trade Commission.