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BBB study finds Vehicle Shipper, Escrow Scams Growing as Demand Increases for Online Vehicle Purchases

 

Better Business Bureau - BBBNashville, TN – The Better Business Bureau (BBB) says that social distancing guidelines during the COVID-19 Coronavirus pandemic have fueled an unprecedented shift to online shopping for consumer goods of all kinds, including vehicles, with particularly high demand for recreational vehicles (RVs).

Many online platforms list cars, trucks, vans and RVs for very low prices, with sellers offering to make third-party delivery arrangements if the buyer pays via escrow. In reality, neither the automobile nor the escrow company exists — leaving the buyer without their money or vehicle. 
 
An in-depth investigative study by Better Business Bureau finds that thousands of consumers have fallen victim to this scam, with losses totaling millions of dollars.

Scam Alert

The study — Virtual Vehicle Vendor Scams: BBB Study Reveals a Growing Scam Using Fake Cars and Escrow Companies to Steal from Unwitting Consumers — points to heightened risk from this scam as demand increases for online vehicle purchases. Read the full study here.
 
According to the study, websites such as Craigslist are rife with advertisements for low-price vehicles, with seemingly eager sellers often claiming that the reduced price is because of an upcoming military deployment overseas, a divorce, or a dead family member to whom the vehicle belonged.

Victims are directed to pay a supposedly independent third party, typically by wire transfer, to hold money in escrow and ship the car. However, no vehicle is ever delivered.
 
“Buying a vehicle online from a reputable seller can a convenient way to shop during COVID-19, but as with any high-profile situation, scammers are finding ways to take advantage of unwitting buyers,” said Robyn Householder, CEO/President of BBB serving Middle Tennessee and Southern Kentucky. “Consumers should use extreme caution not to let a low price and a sad story lure them into paying for a vehicle that does not exist.”
 
Scammers sometimes claim that the transaction is protected by the eBay vehicle protection program. In other cases, they invent bogus websites connected to shipping escrow companies with addresses in towns across the U.S., particularly the Midwest. Those sometimes use the names and addresses of real businesses or car dealerships.
 
Available data suggest that fake online vehicle sales are increasing. Still, this fraud’s scope can be difficult to gauge because many law enforcement agencies do not track it as a separate complaint category. The Internet Crime Complaint Center has reported receiving tens of thousands of vehicle escrow scam reports, with losses in the tens of millions.

Criminal cases likewise reflect millions of dollars in losses. BBB receives hundreds of BBB Scam Tracker reports annually about fake vehicle shippers and escrow companies, with 41% of victims reporting they lost money.

 


 
A Branson, Missouri, man found an RV advertised in a local free newspaper in May 2018. After calling the number in the ad and leaving a message, he received a text message telling him to communicate with the seller’s aunt, who could not talk by phone. The “aunt,” who claimed to have received the vehicle in a divorce settlement, sent a link with interior photos and invoiced the man by email.

She said he could not inspect the RV in person before buying, but told him Missouri Auto Shippers in Springfield, Missouri, would handle the transaction, holding his payment in escrow for seven days so he could return the RV if he wasn’t happy.

The invoice instructed the man to send the money within two hours. When he went to the bank to wire payment, his banker informed him the money appeared to be going to California. The man called Missouri Auto Shippers to point out the wiring discrepancy, upon which the “shipper” hung up on him.
 
Major investigations and prosecutions in New York, Kentucky and Europe have connected this fraud to Romanian nationals and others living in the U.S., Romania and elsewhere in Europe. In the most recent U.S. case, the Secret Service and the Kentucky State Police led an organized crime prosecution that charged 20 people, with a reported $1.8 million in victim funds converted to bitcoin and transferred to Romania.

Fifteen defendants have pleaded guilty, three are fugitives, and two others are scheduled to go to trial in fall 2020. Romanian law enforcement provided key support in the case.

Who to contact if you are the victim of a vehicle escrow scam:

 


About BBB of Middle Tennessee and Southern Kentucky

For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. BBB provides objective advice, BBB Business Profiles on more than 5.3 million companies, 11,000 charity reviewsdispute resolution servicesalerts and educational information on topics affecting marketplace trust. Visit bbb.org for more information.

There are local, independent BBBs across the United States, Canada and Mexico, including BBB Serving Middle TN and Southern KY, which was founded in 1961 and serves 45 counties in Middle TN and Southern KY. Visit bbb.org for more information.


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