Despite only being 3 months into 2016, online scammers targeting classified ads have already cost Australian sellers $260,000. This comes from 544 people who have reported being scammed online – but with many such scams going unreported the number could be much higher.
A number as high as a quarter of a million may seem like it has to be an anomaly, but throughout 2014 scams cost Australians almost $2,000,000.
The Australian Competition and Consumer Commission (ACCC) warned people using classified websites such as Gumtree, Craigslist or Carsales.com.au to buy or sell their cars to exercise vigilance.
One of the most common scams comes from anonymous emails from people claiming to be legitimate buyers. This is what can make buyers more susceptible to these scams, as sometimes it can be impossible to tell the difference between a scammer and a legitimate buyer from the original email.
Reportedly, scammers start by sending a text to the listed phone number asking about the car’s availability but requesting the buyer replies exclusively by email.
At this point, there are no real warning signs to deter someone who is probably quite eager to sell their car. This encourages sellers to contact this supposed buyer, who replies with something similar to this:
Thanks for getting back, I’m cool with the price likewise the condition, I work with New Zealand Oil and Gas (NZOG) and we are presently offshore in New Zealand Taranaki Basin.
We do not have access to phone at the moment and that’s why I contacted you with internet messaging facility. I will be paying you through PayPal linked up with my Westpac bank account, please get back to me with your Paypal details, I have also contacted my courier who will come for pick up and deliver it to my place in Darwin after the whole fund has been cleared into your acct.
Dimitri Kulshitsky, manager of operations and security at Carsales.com.au reports that if the seller obliges and sends their payment details, the scammer would fake a transaction report to convince the seller that money has changed hands.
While PayPal can be very empowering for buyers over the internet, it’s no coincidence that the scammers choose it for their fake transactions. PayPal’s buyer protection means there is a delay in the transfer of funds, allowing time for the scammers to strike in one of three ways:
- Someone posing as a courier picks the car up before the payment is seen to come through. The payment never turns up and the car will be long gone in no time.
- The buyer demands a refund for their transaction. As payment was never made in the first place, sellers caught off guard think they are doing the right thing by refunding the buyer who never made a payment in the first place.
- The buyer claims to have paid more than the asking price and asks for the extra to be “reimbursed”.
Mr. Kulshitsky went on to explain the conmen’s methodology. He explains that scammers generally pretend to be from some sort of offshore or remote location, sometimes pretending to be a soldier deployed abroad, making face to face contact impossible. This helps the scammer keep their distance from their mark.
They also claim to have limited access to their phone or the internet, forcing their marks to communicate via written communication such as text or email. Again, this helps the scammers keep their anonymity.
Another scam that targets car buyers follows a similar pattern – the con artist poses as a seller desperate to shift their car as soon as possible. They promise to send the car via courier once payment has been made, but the car never arrives.
Top tips to protect yourself when selling/buying cars online:
- Be wary of buyers from abroad – This isn’t a xenophobic thing, I promise. It’s just generally advised not to sell to anyone that you cannot verify is real. Try and find a buyer you can meet in person if possible. Poor use of English language is not always an indicator of a scam, but frequently scammers will deliberate use grammatical errors to appeal to ‘the lowest common denominator’.
- Never give up your car before payment has entered your account – This is a no-brainer. No payment, no product. You wouldn’t expect to drive a car out a dealership before payment has been made, so expect prospective buyers to treat you thus. This is also why you should stay away from PayPal for important transactions, as it’s hard to track.
- If buying, never hand over money for a car you haven’t seen – Even if the seller is legitimate, there could be a whole host of issues with the car that won’t be revealed without close inspection. Never buy a car from an unknown source unless you can properly verify that it’s in the condition as described.