In the last couple of months, I’ve had at least six friends I can think of who have almost fallen for scams where people pretended they were buying or selling something. The scams ranged from hiring them for services through selling a Model-A Ford. In all but one of the cases my friends thought something fishy might have been going on, so they contacted me to see what I thought.
Speaking of Fords, I was looking for a new F-150 pickup truck online. Found a great deal and contacted the seller. I asked why it was so cheap and they gave me a poor excuse, so I dug into it a little more. I did a reverse image search on Google to see if the photo of the truck had been found elsewhere and… it had. The bad guy had copied a photo from a legitimate car dealer posting and put it in their fake advertisement. I confronted them with a question about what I had found and I never heard from them again. Too bad, it was a nice truck 😉
E-commerce has its benefits. But, you must stay alert to common red flags when online buying and selling to protect yourself from scams.
Fraudsters are actively targeting both parties in online transactions, resulting in a rise in purchasing scams. Consumers should be alert to red flags when using common e-commerce platforms such as eBay, Gumtree, Facebook Marketplace, and Carsales to help them spot potential scammers and avoid becoming victims of fraud.
Request identification documents such as a driver’s license, passport, or Medicare card number (these should never be shared with an unknown party, as it may involve identity fraud).
Sending fake emails purportedly from e-commerce platforms like eBay or Gumtree, asking to move the conversation onto different platforms like WhatsApp or Messenger,
Using payment methods such as gift cards, money wiring services, or PayPal’s ‘Family and Friends’ strategy (which does not have adequate protection)
Offering excuses for delays in payments/items delivery and claiming they are on deployment in armed forces overseas traveling or unwell, so only communicate via email instead of a phone video call or personal meetings.
Selling Items Online
A scammer posing as a legitimate buyer may:
- Falsely claim that they paid or overpaid you, and request that you return some funds.
- Email you falsified or altered receipts or money transfer confirmations, claiming to be from companies such as PayPal, eBay, or your bank.
- Ask you to pay for transportation or shipping costs upfront, promising to reimburse you.
- Cease communication after you send the item so that you lose the thing and money paid for postage and other services.
Buying Items Online: Look out for these red flags.
- A scammer posing as a legitimate seller may:
- Falsely claim to have paid or overpaid you
- Request that you return some funds to them,
- Email falsified or altered receipts or money transfer confirmations claiming to be from companies such as PayPal, eBay, or your bank.
- Ask you to pay upfront for transportation or shipping costs and promise reimbursement, then cease communication after sending the item, so you lose the object and money spent for postage and services.
Case study – selling a phone
Jim created a listing on a typical online marketplace to sell his old phone and make money toward buying a new one. He received a message from a potential buyer, Joseph, shortly after. Joseph asked me to email him directly to discuss the sale further rather than going through the online platform. He expressed his eagerness to proceed with the deal – explaining that he was on deployment in the army and needed a better phone. Joseph urged me to quickly send the telephone as he needed it urgently before they deployed. The next day, he made the transfer and sent me a screenshot of his receipt.
He messaged me again shortly after, saying he had accidentally overpaid and wanted a refund for the difference. Even though the funds had yet to land in my account, I was happy to refund him the difference upon inspection of a legitimate receipt.
I sent the item to him a week later and refunded the $250 difference, but I still had not received his transfer to my bank account. Joseph blocked me on email and social media so that I couldn’t contact him again. Consequently, I was out of pocket for the phone, lost money from its sale, and paid an unsuccessful ‘refund’ for his ‘overpayment.’
- The Buyer is in a rush.
- The Buyer is in the military.
- Accidental Overpayment
- Unverifiable Receipts
- Do a Google Search on the Buyer – you may find this name and situation has occurred multiple times.
- Use a secure payment method with protection, like a credit card. Never use a debit card, and do not wire money.
Online shopping scam – Katrina lost $107
A Facebook marketplace ad advertised cheap Saunas and other outdoor wooden products. Payment for the product was via credit card. Then Katrina received an email saying that due to logistic issues, they canceled her order and refunded all the money back to her credit card. The money never was refunded to her credit card.
- Meager prices from a new website or seller;
- The website encouraged the Buyer to pay via direct bank transfer by offering a discount for this payment method. It charged a higher fee for credit card payments.
- Do some research on the seller and check independent reviews from other consumers; and
- Choose a secure payment method like a credit card or PayPal.
How to protect yourself from online buying and selling scams
Follow the tips below to help keep your identity and money safe online.
- Be wary of any sellers who want you to pay for the item with gift cards or cryptocurrencies, and always use secure payment options such as PayPal (not PayPal Family and Friends) or a credit card (not debit card).
- Research the Buyer or seller and look for reviews.
- When possible, always exchange the item and cash in person. Watch out for strange-feeling money that appears to be a higher denomination than it should be (e.g., a one-dollar bill with an overlay of 20 or more). It may be counterfeit “washed” money.
When purchasing an item online
- Conduct a Google reverse image search for the photos of an item before buying it, as you may uncover that the picture already exists in a genuine or fraudulent ad.
- Request a video call from the seller to inspect the item more if meeting in person is not an option.
- Only purchase an animal once you can inspect it in person and have time to seek professional advice from a reputable breeder’s association or your vet. If they don’t hold the animal while you do this — chances it is a scam.
When selling an item online –
- Inspect any emails claiming the item is paid for carefully.
- Ensure the funds have cleared your bank account before proceeding with the sale or delivery of the item.
- Be wary of any buyers who ask you to charge extra for transportation costs. That is almost assuredly the sign of a scam.
Cashier’s check fraud and scams
What are cashier’s checks?
A financial institution guarantees the payment on a cashier’s check, not the purchaser’s. Although deemed safe for making a large purchase, remember that the Uniform Commercial Code allows stopping payments to be issued under specific circumstances if they are lost or stolen. To protect yourself from potential fraud, never assume you have received funds until they are in your account. Be cautious when accepting a cashier’s check in exchange for goods or services, as any resulting losses will likely fall on you.
How a Cashier’s check scam works
- Someone almost always scams you with a genuine-looking cashier’s check or money order, requesting that you wire money to them or send goods in return.
- However, when you deposit or cash the check or money order, the check is identified as fraudulent.
Avoid cashier’s check scams – Some Tips.
- Do you know the person sending you the check?
- Cautiously accept checks, even cashier’s checks, from people you don’t know—as pursuing a remedy may prove difficult if the check is a scam.
- Verify the check’s authenticity.
- Visit or call the issuing financial institution’s branch that issued the check. Research their correct phone number, as the one listed on the check might be fraudulent. Then you will be able to determine if it is genuine.
- Verify funds availability
- Ensure the money is in your account by calling your financial institution before delivering the item.
- Keep all documents
- Save all cashier’s check-associated documents, as this paperwork may be helpful if anything goes wrong.
Typical cashier’s check scams
Purchasing goods and services with a Cashier’s Check The Buyer tricked you with a fraudulent cashier’s check after you shipped the goods in exchange for the agreed-upon price.
- Prize scams
The people sending the letter will have you deposit a cashier’s check to cover taxes and fees related to your supposed prize money. You must then wire money back to them with some of the funds from that deposit. Whatever amount you do not wire is yours to keep, but beware–the promised prize money never arrives, and you are out any fees paid.
- Property rental scams
The potential renter pays the requested fees upfront with a cashier’s check without viewing the property due to taking a job. The next day, they declared an issue with their job – they no longer needed the rental but would like you to return some of the rent. Upon sending back the refund, you realize that the check was fake.
- Mystery shopper scams
We have chosen you to act as a mystery shopper. We have sent you a cashier’s check and instructed you to deposit it into your account, purchase items at designated stores with some funds, transfer another portion of the funds to a third party using a wire service company, and keep the rest. Unfortunately, the cashier’s check was fraudulent, causing you financial losses for what was spent and transferred.
- Work-at-home scams
Receive payments via a cashier’s check, deposit them into your account, and forward the money to somebody else. Often advertised as a work-at-home check processing job, these schemes may be problematic – in some cases laundering money for criminals or, after gaining trust, sending fake checks and losing money.
The projected number of cars sold online worldwide by 2025 is a staggering 6 million, a 600% increase from 2019. Be vigilant when buying cars online. Shopping for vehicles online is convenient and helps you save money. However, remain wary of car-buying scams to ensure your experience goes smoothly.
Millions of dollars are lost yearly to online car-buying scams such as fake ads, gift card ripoffs, fraudulent wire transfers, title washing, “curbstone,” identity theft, counterfeit escrows, payment plans, and phony checks. To protect yourself from these scams, follow these steps.
Is It Safe to Buy and Sell Cars Online?
People should weigh the pros and cons of buying or selling a car online just as they would with any other way business venture.
Here are five of the pros of buying online.
- You can save time by shopping for a car on your computer or mobile device rather than driving from dealership to dealership.
- Shop anytime; online marketplaces for buying and selling cars are always open.
- A salesperson won’t press you into making a hasty decision when shopping online, creating a no-pressure environment.
- The price listed online is often the final amount unless stated differently. There are no hardball negotiations and upsells with a salesperson.
- Online vehicle purchases can be delivered anywhere, including home or office.
Here are five of the cons of buying online.
- You can’t inspect a car in person before buying when you shop online. Still, you may view detailed photos and videos of the vehicle.
- Typically, doing a test drive is out of the question. However, some online sellers now provide test drives for online car purchases.
- You may be unable to negotiate a lower price as there is often less room for negotiation. However, not having to engage in the process of haggling is nice.
- When you buy online, choosing a lender is often only allowed from a single source or several pre-selected lenders.
- When trading in your car, you may find less flexibility in terms of value.
You can safely buy and sell cars online by taking proper precautions to protect yourself. Several reputable online marketplaces exist, such as CarMax, Carvana, Vroom, Autotrader, CarGurus, CarsDirect, Carvana, and eBay Motors.
Scams to Watch Out for When Buying a Car Online
Here are some of the most common online car-buying scams to look out for—and how to avoid them.
Advertisers who are crooks may post fake ads of cars they don’t own that look legitimate with pictures and contact information. To avoid this scam, ask for specifics about the vehicle, like the VIN, and walk away if a private seller will not let you inspect it or refuses to meet in person.
Gift Card Ripoffs
Never purchase a car with gift cards; if anyone insists on this payment method, it is a red flag. You are almost guaranteed not to receive the vehicle you hoped to buy and never see those gift cards again.
Fraudulent Wire Transfers
Politely decline to exchange money for a car through a wire transfer if the seller asks; recovering your money can be difficult if the deal becomes a scam.
Order a report to get a clear picture of the vehicle’s history before you buy it and avoid being scammed by title washing. Illegally masking critical information about the car, such as significant accident damage, to deceive potential buyers, especially when cars come from areas affected by storms, is known as Title Washing.
Curbstoners can clobber unsuspecting buyers with fraudulent deals involving salvaged or damaged used cars. To avoid this, ensure that you only do business with reputable sellers with the required license or permits and maintain a regular place of business. Check them out in advance so they don’t disappear without providing contact information as some curbstoners do – instead of conducting deals in reputable sites such as vacant parking lots, along the side of a road, or even at your doorstep.
Beware of providing personal data to anyone claiming to buy your car or accept a trade-in, as they may be attempting to steal your identity. The requested information could include bank account numbers, Social Security numbers, and car maintenance records; in this case, make copies of the latter and black out any personally identifiable information.
Online Car Selling Scams
Here are some of the most common online car-selling scams to look out for—and how to avoid them.
A fraudster posing as a buyer may scam you when purchasing a car by using a fake escrow service to hold the money. To protect yourself, choose an established and trustworthy escrow service before handing over the car title – otherwise, you risk not being able to withdraw the funds.
Never agree to a payment plan when selling a car, as scammers might pose as buyers and try to steal money by taking possession of the vehicle after making initial or two payments but then stopping. If this happens, your options for getting the rest of your money are limited.
Personal Checks or Cashier’s Checks
Verify the legitimacy of a personal or cashier’s check before accepting it as payment for a car. Otherwise, if you sign over your title without confirmation, you risk receiving insufficient funds once attempting to cash the check. To ensure this does not occur, contact the financial institution that issued the check before transferring ownership in any way.
What to Do if You Are a Victim of an Auto Scam
If an online car-buying or car-selling scam has victimized you, here are some things you can do:
- Contact your state attorney general’s office and your local Better Business Bureau.
- The FBI’s Internet Crime Complaint Center and the National Consumer League’s fraud center accept claims for these crimes
- Report the fraud to the Federal Trade Commission.
- Contact the company or financial institution that handled a wire transfer (if applicable).
- Change usernames and passwords for any personal information provided to a scammer.
- Monitor credit reports for suspicious activity tied to identity theft.
The Bottom Line
You must understand the potential risks of online selling scams. Even though you may trust some sellers more than others, it pays off to take extra precautions and educate yourself on how these scams work before investing in any e-commerce opportunities. By doing your due diligence and understanding tactics used by scammers, you can protect yourself from becoming their next victim.