How To Avoid Online Car-Buying Fraud | Edmunds.com
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How To Avoid Online Car-Buying Fraud

Internet Crooks Even Use a Fake Edmunds Site to Trick Buyers


Most car shoppers use the web in their research or buying process, and it usually goes off without a hitch. But there are shadowy corners of the internet that harbor scammers and crooks, and they're working hard to get your money by using fraud and fakery.

Currently, for example, scammers are using a fake Edmunds.com site that says we offer a cash escrow service, in which we act as a middleman between private-party car sellers and buyers.

It's not so. Edmunds.com does not assist in private party transactions between buyers and sellers by holding titles, cash or vehicles. We don't ship cars, either. If you encounter any such claims, please do not proceed. Instead, contact us immediately. You also can report this fraud to the FBI's Internet Crime Complaint Center.

(In a particularly cruel twist, some of the information about using the "service" is shown under the heading "Fraud Awareness" on the phony Edmunds home page. Our actual site has no such section.)

Here's how the scam works: It usually begins with a car shopper spotting a too-good-to-be-true ad on a site where private parties buy and sell cars, including such places as Craigslist. When a buyer agrees to purchase a vehicle, the "seller" gives him a link and instructs him to wire money to the account of the escrow agent (Edmunds, in the current scam). The promise is that the escrow company will hold the cash until the vehicle is delivered. Once the cash is paid, the scammers cease contact with the buyers. And the car is never delivered, of course. The FBI has more information about this kind of online car-shopping fraud.

Since 2010, Edmunds.com has received more than 400 reports of escrow scams using our name. Of those, at least 35 victims have lost money by following through with the transaction. We don't want you to be one of them.

Here are some other tips for avoiding online escrow fraud, based on advice from the California Department of Business Oversight.

1. If a car deal seems too good to be true, it probably is. Is someone offering a brand-new Mercedes-Benz SL63 AMG for $80,000? How could that be so? It retails for twice that much.

2. Try to establish telephone contact with the seller to find out where the car is. Ask to inspect it, even if you don't plan to do so. Ask if the title is clear and in the seller's possession. Such questions may put off scammers.

3. Verify that the escrow company you plan to use is properly licensed. Call its phone number and ask to speak to a representative. Visit its website directly, not through a link sent to you by the seller.

4. Don't give out your financial or personal information (Social Security number, credit card number or bank account information) until you verify that the online escrow company you are using is legitimate.

5. Beware if a seller insists on using a particular online escrow company. It could be an attempt to steer you toward a fraudulent escrow services site.

6. Check the online escrow company's website for sloppy content, spelling or grammar errors. (For example, the fake Edmunds site refers to our "Fraud Prevention Centre." That British spelling of "center" is a little bit of a tipoff.)

7. Steer clear of sites that require users to set up accounts with online payment services. Legitimate escrow companies don't use person-to-person money transfers like Western Union or MoneyGram or direct you to send your payment to an individual rather than a corporate entity.

8. Fake escrow company sites often display logos from the Better Business Bureau, VeriSign Secure or TRUSTe. Check to make sure the escrow company really is endorsed by these organizations.

9. Avoid escrow company sites with odd domain names. eBay's anti-fraud section offers some good examples of suspect domain names.


To find a dealership that knows how to treat shoppers right, please visit Edmunds.com's Dealer Ratings and Reviews.

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