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Buyer beware: online car sales scams

Tara Baukus MelloHeard lately about the killer deal on a repossessed car? Chances are it's too good to be true.

Scammers have been busy creating websites that appear to be run by established car dealerships offering repossessed cars at rock-bottom prices, but it's only a scam to make unwary consumers part with their money, the Better Business Bureau says.

In the most recent scenario, the scammers use the name, location and other pertinent data from established car dealerships to convince shoppers that the deals offered are legitimate. Buyers are then instructed to wire a deposit to an individual rather than the company, which according to the phony website, "helps us avoid taxes legally." Once the deposit is received, the buyer is supposed to receive the car at his address within five days and pay the balance due. The Better Business Bureau reported this dealer scam in Colorado, Florida, Georgia, Michigan, New Mexico and Texas.

That said, there are always good Internet deals to be found on used cars, and most websites promoting these car deals are legitimate. Here are some tips for protecting yourself when buying a car online.

Do business only with reputable companies. If it's an Internet-only business, shop only on those that are well-known, such as eBay.com and AutoTrader.com. If the business claims to have a brick-and-mortar dealership, then look up the phone number of the store on your own -- not the one on the website, which may be part of the scam -- and call the dealership to ask about the car you want. In the most recent scam, the legitimate dealerships knew nothing of the website when shoppers called.

Confirm the car's details. Ask for the car's vehicle identification number, or VIN, and order a vehicle history report from Carfax.com or AutoCheck.com. Enter the VIN in the National Insurance Crime Bureau's VIN Check to see if it's a salvage car, or a car that has been damaged and is no longer road worthy. If you can inspect the car yourself before buying or even before putting down a deposit, do so. Hire a professional mechanic to inspect the car as well.

Choose the escrow company. If you opt to move forward with the purchase, be wary of any sellers that require you to use a specific escrow company. Choose an escrow service that is well-established and make sure you verify that it's licensed. Be cautious when following links from the seller's website or e-mail correspondence, since those links could appear legitimate but actually direct you to another site that is part of the scam.

Conduct an Internet search for any escrow companies suggested by the seller, looking for any complaints. Review the company's website thoroughly to see its fees and details of its services, and make sure it matches what the seller claims. Escrow services never direct you to use a personal money transfer service such as Western Union. Don't give out your personal finance information such as your bank routing number until you've verified the escrow company.

If you've been a victim of an online car sales scam, while it's unlikely you'll get your money back, you should report it. Contact the Internet Crime Complaint Center, a government-run effort to track cyber crime, as well as the Better Business Bureau.

Ask the adviser

If you have a car question, e-mail it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories.
 

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