With the technology that is available today, one can purchase almost anything online, even cars. However, although many online car dealers are reputable, there will always be the possibility that some sort of scam can occur. The following paragraphs will highlight a few of these scams relating to online car dealer transactions and detail how one can prevent themselves from becoming a victim of one of these scams.

Escrow Services That Are Fraudulent in Nature

When individuals purchase expensive items online, such as automobiles, they will frequently use escrow services. Escrow services hold a buyer's money until the product is delivered from the seller and received by the buyer. Only then will the money be released from escrow. Scams in this arena occur when an individual sees a vehicle they want to purchase online on one of the many auto sales or auction websites and relay their interest to the seller. The seller will then email a generic type of letter to the interested buyer and state that a third party escrow service will hold the funds. When the buyer sends the money to the supposed escrow service, no vehicle is ever received and the money disappears along with all parties, i.e. the seller and fake escrow service.

There are a few different precautions which an individual can take to protect themselves from falling prey to one of these online scams. The first and most important thing one must do in order to help protect themselves from fraudulent escrow tactics is to thoroughly look into the legitimacy of an escrow service prior to using them. One can check out escrow companies by searching online or with corporation filings to ensure that the escrow company is legitimate.

Another key indicator that something may not be quite right with an escrow company is when the company sends the buyer a form letter that does not even address the buyer by name. This factor, when added with others, may help the buyer to be cautious about dealing with a certain company.

Buyers may also protect themselves against this type of fraud by using their own escrow company; one which they know is legitimate. By doing so, the buyer is helping to ensure that the escrow company is an independent entity and will do a good job. However, prior to choosing a particular escrow company, just make sure to follow up on their legitimacy as well so that one does not choose an illegitimate escrow company on their own.

Lastly, if individuals are really skeptical of using any escrow service to complete an auto purchase, consider purchasing elsewhere as opposed to online. By doing so, the buyer may feel more at ease by having a face-to-face transaction.

Although one can never be entirely free from worry when completing an online auto transaction of this nature, the aforementioned items will help to better ensure that the escrow company which one is using is legitimate.

Fraud via Cashier's Check

Another online car dealer scam that has occurred to individuals in the past is the cashier's check scam. This fraudulent act occurs when you, the seller, try to sell your used car via an online car dealer website or auction site and the buyer pays for the vehicle with a fake cashier's check. The end result of this scenario is that the seller is minus one automobile and has no money to show for it. There are a few different ways in which sellers who wish to sell their vehicles online can protect against becoming a victim of this criminal act.

The first way to protect oneself against fraudulent cashier's checks is to not accept cashier's checks at all. There are a number of other options one can choose to receive payment through and eliminating the acceptance of cashier's checks altogether will eliminate the possibility of receiving counterfeit ones.

Another way in which sellers of used automobiles online can eliminate scams relating to cashier's checks is by completing the sale during bank hours. By doing so, the seller of the used vehicle is able to call the bank that issued the cashier's check and make sure that the check is in fact genuine. For something that may just take a few minutes by way of a phone call, it is definitely worth it to ensure that the payment is good.

Conclusion

In summation, it is important to point out again that many online car dealer transactions will be free from fraud and scams. However, it is important to have the knowledge that these things happen from time to time and there are ways to help safeguard against them.