Car Dealership Scams Menace
Having a car dealership can come with all sorts of inconveniences, but the worst of all can be when you are into buying a car, only to fall prey of a scammer. Scammers come with manipulations, tricks and convincing their targets to make the best out of the opportunity. This is why you need to be very cautious when engaging anyone in a car buying deal.
Manipulating the Odometer Reading
Manipulating a cars odometer, which is also known as ‘Clocking’ or ‘busting miles’ is the illegal activity of changing the odometer reading of a car to a lower mileage. Individuals who carry out this illegal practice are able to reprogram a digital odometer using software applications or other devices.
Salesman Buying Tricks
When you’re selling a car to a dealer or trading it in for a newer model, you want to get a fair price for it. Unfortunately, there are many dealers and salesmen who will use every trick in the book to drive down the price they will pay for your vehicle. Some are overpowering and will try to convince a seller that there are problems with their car that will affect the price.
A wide range of payment scams have emerged in recent years. For example, scammers who sell cars and car products on eBay may ask for payment through PayPal. However, many buyers do not realize that PayPal does not cover the purchase of cars through eBay.
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There are many scammers out there, waiting for the right opportunity to strike a fortune at the expense of a naïve car buyer seeking to make a purchase. However, state governments are doing all they can to minimize this menace at all costs. This can be effective if the public can make an effort to understand the anti-fraud law in detail since they have a part to play in fighting fraudulence in car dealership.
Auto dealer fraud law consists of state and federal rules designed to protect consumers shopping for vehicles, and to punish dealerships that take advantage of their customers. These laws deal with deception and unfair practices by dealers, as opposed to the sale of defective vehicles, which is the subject of a separate set of rules known as “lemon laws.” Primary sources of auto dealer fraud law include the FTC regulations found at 16 CFR 455 (the Used Car Rule), other federal and state consumer protection laws, and the common law tort of fraud.
To members of the public, vehicle purchases and leases are complicated transactions with which they may have little experience. Dealers, on the other hand, are well-versed in these transactions. They are also incentivized by commission pay structures and the potential for financing profits. Fraudulent dealers may rationalize their conduct based on a general attitude within the industry – especially the used car industry – that ingenuity in the sales process is acceptable, and that customers buy at their own risk.
Most types of fraudulent activity that take place at auto dealerships can be characterized as either non-disclosures, or affirmative misrepresentations. Non-disclosures occur when a salesperson withholds information affecting the desirability or value of a vehicle. Examples include a failure to inform the customer that the vehicle was previously used as a rental, that it was involved in a collision or sustained other hidden damage, or that the vehicle’s warranty has expired.
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If you are unsure on how to bust a stalking scammer, you may have little to do than you may think. Only watching the form of communication such a person keeps should give you a hint that there is something sinister about them. Do not be hasty to enter into a deal with someone you are not conversant with.
Cashier’s Check Scams: In a typical scenario, a buyer – who usually inquiries from overseas – arranges to pay for the car with a cashier’s check or certified check in an amount that’s more than the vehicle’s purchase price. The buyer justifies this by saying a previous sale fell through or the extra money is needed to pay for shipping expenses or customs fees. Note that the initial-and even, perhaps, all subsequent-contact from this type of buyer is via text message or email, with excuses provided for a lack of phone communication.
The buyer then asks the seller to wire the difference either to him or to the shipping company to cover expenses. Or a buyer will send a cashier’s check as a down payment, then decide to back out of the deal and ask for the money back.
Third-Party Transaction Services: PayPal and Google Wallet are examples of legitimate third-party transaction service providers. However, false representations of these companies’ products are often used as a cover to commit fraud. One common scenario is for a fraudulent buyer to request purchase of the vehicle without ever seeing it, claiming it is “priced favorably.” Fraudulent buyers typically confirm the asking price, ask for photographs, and ask whether there have been any repairs to the vehicle. Upon the seller’s response, the fraudulent buyer then tells the seller that a particular third-party service is the most secure way to conduct online transactions and asks for the seller’s third-party service account details.
At this point, the seller will often, as with the Cashier’s Check Scam, explain that payment has been arranged in excess of the selling price and instructs the seller to return the overpayment via Western Union, MoneyGram, or another money transfer solution. Unfortunately, the seller does not learn that the PayPal or other third-party transaction was not real until after the successful money transfer of the overage.
Sourced From: https://www.cars.com/articles/how-to-avoid-used-car-scams-1420680887789/