‘Beware of vehicle scams’ ACCC warns as car ad rackets deceive many
Scamwatch received over 346 reports of vehicle scams in just a span of three months due to scammers impersonating defence personnel to con their victims.
With a reported $288,459 in losses during this period, vehicle scammers have fooled many Australians by posting fake online listings offering to sell in-demand cars at well below market value. They then seek payment to secure the car for the buyer but would never deliver the vehicle in the end.
Vehicle scams are commonly hosted on sites such as Facebook Marketplace, Autotrader, Car Sales, Cars Guide and Gumtree.
“As second-hand car sales increased during the pandemic, unfortunately so did vehicle scams. If current trends continue, Australians could lose much more to vehicle scams this year than the $1 million lost in 2020,” ACCC Deputy Chair Delia Rickard said.
In this latest scheme, scammers pretend to be defence personnel. In 97 per cent of reports Scamwatch received, the scammer claimed to be in the military or to work for the Department of Defence and would say they wanted to sell their vehicle before deployment. This would create a sense of urgency in potential buyers while explaining the unusually low listing price of the vehicles and why buyers could not inspect them prior to payment.
“A price that is too good to be true should be a warning sign for potential buyers. If a classified ad offers a vehicle at a very low price, the ad might not be legitimate. For example, one Scamwatch report noted a listing that advertised a car for nearly $10,000 below its market value to entice buyers looking for a bargain,” Deputy Chair Rickard said.
Vehicle scammers often seek payment through a third-party website. A large number of the reports also mentioned the use of escrow agents, a third party who is supposed to ‘hold’ the money from the buyer until goods are received.
Other commonly requested payment methods include eBay, direct bank transfer or international money transfers.
In addition to losing money to vehicle scams, around 20 per cent of consumers who reported vehicle scams have lost personal information after providing their address, phone number and copies of their driver’s license to the scammer.
“Always try to inspect the vehicle before purchase and avoid unusual payment methods. If you have any doubts, do not go ahead with the deal,” Deputy Chair Rickard said.
Stay aware of vehicle scams
To protect your identity, never provide your personal details to someone you have only met online.
Deputy Chair Rickard said to be suspicious if the seller claims to be unavailable and insists on payment before meeting up or having the car be picked up. This is because it is relatively common for scammers to claim that they are travelling or moving away to avoid meeting buyers before payment.
“Fortunately, over 80 per cent of people who reported vehicle scams to us managed to avoid losing money by identifying the scam early. We encourage consumers to trust their instincts. If something seems too good to be true, it probably is,” Deputy Chair Rickard said.
ACCC also advises individuals to be wary of vehicle scammers’ email addresses. Email addresses that do not bear the legitimate Defence email format of “@defence.gov.au” may be an indication of a scam.
Some examples of the fake Department of Defence emails that have been used in recent vehicle scams include:
However, even the correct email format does not guarantee the car ad is not a scam since scammers are able to spoof email addresses. It is best to look for all warning signs to avoid being scammed.
If you have been the victim of a scam, the ACCC advises you to contact your bank as soon as possible and contact the platform on which you were scammed to inform them of the circumstances.
If you have experienced a loss online and believe the perpetrator is located in Australia, you can also report the scam to ReportCyber.