How to avoid being scammed online

A rise in online car shopping due to Covid has led to a spike of scammers ripping off Aussie buyers. These are the clues you can look for to avoid being conned.

Carsales Trust and Safety manager Stephen Fairlam has some helpful tips on how to avoid being scammed. Picture: Josie Hayden

Australians are losing millions of dollars a year to online scams and fake ads offering cars for sale.

Scammers post fake ads on sites such as Facebook Marketplace, Autotrader, Carsales, Cars Guide and Gumtree by using images and details copied from a legitimate ad and vehicle to trick potential buyers.

The fake ads target in demand vehicles such Toyota HiLux and Ford Ranger utes, but any vehicle could be targeted.

Scammers target vehicles across all price ranges, the ACCC said one victim had been scammed out of $180,000 for two vehicles by one bogus seller.

Data shows that men are more likely than women to fall victim to an online classified scam. Those aged 25-34 are most at risk and NSW residents have lost the most.

Drivers are on track to lose millions to online car scams in 2021-22, which is more than four times what was reported in 2019, according to the Australian Consumer and Competition Commission.

Make sure you always inspect a vehicle in person before paying for it.

Online sales have accelerated since the start of Covid-19 and other market factors such as a shortage of new cars have driven more buyers to look for second hand vehicles, which is putting more buyers at risk.

So what are the warning signs and how do you protect yourself? Here’s the expert advice:

BEST BUY EVER

Yes – the critical way to avoid being scammed is to follow the old adage that “if it seems too good to be true, it probably is”, says Stephen Fairlam, the trust and safety manager at Carsales.

Scammers lure buyers eyeing a bargain by pitching their vehicle thousands of dollars below the prevailing market price. Fairlam suggests looking around to get a solid idea of what they should be paying for the vehicle.

Ask the seller directly why their car is priced thousands of dollars less than similar vehicles.

Classified sites such as Carsales also have customer service representatives who can verify a classified ad if you think it is suspect.

Fairlam says, “if it’s too good to be true, it probably is.” Picture: Josie Hayden

GO SLOWLY

Scammers will also try to rush through the sale, Fairlam warns, by claiming they are moving overseas or interstate so they are “desperate” to make a sale.

A popular ruse is pretending to be defence personnel heading to deployments, the ACCC says.

The seller’s email address may give some clues, so check theirs ends in @defence.gov.au but scammers frequently fake email addresses as well.

If a seller is pushing a sale too hard, that’s a red flag. Walk away and don’t be forced into a situation you can’t control.

Fairlam says it’s a good idea to stay within the car website’s messaging framework when talking to sellers.

“If people are conversing with sellers we would recommend sticking with the classified’s internal communication services such as the messaging system,” he says.

“Scammers will try to take it out of that domain where they can push the sale and the company has less control to block the seller.”

NEVER BUY SIGHT UNSEEN

Carsales recommends buyers always physically inspect vehicle they are buying.

“I know it can be a bit tough with the current Covid-19 situation, but always try and have you or someone else you trust to meet the seller and inspect the vehicle in person.”

If the seller is reluctant to give you a home address, or wants to meet somewhere neutral, that can be a bad sign as well.

The ACCC says scammers will come up with a host of reasons why you can’t inspect the vehicle in person. Some will say they are based overseas and claim an agent will deliver the vehicle upon the receipt of payment.

Try to get the seller on the phone early to verify their authenticity. Most scammers will want to stick to messaged based communication.

ASK THE AWKWARD QUESTIONS

Before and during your inspection don’t be afraid to tackle the tricky issues. You are not there to make friends with the seller and legitimate one won’t baulk at details.

Ask to see the vehicle’s service history to make sure it has been properly cared for. It may cost extra, but asking your local mechanic to take a look is worthwhile.

“You can also do history checks that can tell you if there are any (financial) incumbents on the vehicle or if it has been written off before. I would recommend getting the vehicle mechanically inspected as well,” says Fairlam.

AVOID THE UNUSUAL

When it comes time to pay another indicator you could be dealing with a scammer is a request for an unusual payment method.

Fraudsters will often ask for payment via a third party “escrow” agent who will hold the money until you receive the vehicle.

The scammer then takes your money and the vehicle never arrives. They will then break off all communication.

Other commonly requested payment methods include eBay, direct bank transfer or international money transfers.

You should be suspicious if a seller demands payment before meeting or handing over the vehicle.

The ACCC warns that 20 per cent of vehicle scams also involve theft of personal information such as a phone number, address and driver’s licence. The watchdog recommends never handing over your details to someone you met online.

WHAT TO DO IF YOU ARE SCAMMED

• Contact police to report the crime
• Contact your financial institution to halt payment
• Contact IDCARE to report potential identity theft
• Contact the hosting website so they can gather information on the scammer