It’s a hard truth everyone has to face when selling a car: There are plenty of people out there who would love to get their hands on your car without paying a dime for it. No, we’re not talking about carjackers, we’re talking about scammers. Both types of criminals are car thieves, but while one tries to physically steal your car when you’re not looking (that would be the carjacker) the other tries to make you think you’ve legitimately sold them your car only to find out the payment was fake. What should you do if you find you’ve been scammed selling your car? This article will outline not only how to avoid being scammed, but also what to do if it happens to you.
Scammers on the Prowl
We’ve previously outlined the Safe Ways to Accept Payment When Selling Your Car. What you need to keep in mind with any form of payment you accept is to not hand over your car to any buyer until you are 100% certain the payment has cleared. You might think cash would be the safest way to accept payment, and it can be if you do it right. After all, you don’t want to be walking around with thousands of dollars on you for any length of time, right? If it’s going to be a cash transaction, have the buyer meet you at your bank and give you the money so you can go in and deposit it (and have the bank check if the bills are legitimate or counterfeit, because yes that happens sometimes) before you give the buyer the car or sign over the title. And if it happens to turn out that the money is counterfeit, then the bank could call the police.
A personal check or even a cashier’s check can be faked or forged, which is why you definitely want to let the buyer you know you’ll get back in touch with them when the check has cleared and you’ve verified the money is safely in your account, again before giving them your car or signing over the title. Another option to meet the buyer at their bank to have a cashier’s check prepared so you know there and then the money was available in order to prepare the check—and then you’d want to immediately get it deposited into your account, and again wait for it to clear before handing over your car.
A lot of people, however, tend to be more trusting of potential buyers than they probably should be, which is why thousands of people are scammed every year when they’re selling a car.
Red Flags to Watch Out for When Selling Your Car
There are some tell-tale red flags to watch for when selling your car that can help you avoid being scammed. The biggest one that people still inexplicably fall for is when someone offers to buy your car sight unseen. Think about this for a minute—would you ever buy a used car without seeing it in person first in order to make your own assessment of what kind of shape it’s in or to test-drive it, or even to take it to a trusted mechanic to check it out? And yet this is happening more than ever right now as online-only car sales are on the rise because of the pandemic. This means more car sellers than ever are getting used to the idea that people can and do buy cars sight unseen. But in a private sale by owner situation to a private buyer, this should still be considered a serious red flag.
The Sight-Unseen Buyer Scam tends to work something like this: The buyer will contact you and tell you how excited they are because they’ve been looking for this exact kind of car and are so happy they’ve found your listing. But they’re in a hurry or have some other extenuating circumstances that sound very legitimate but aren’t What they say is they’ll send someone else to come get the car and that they will be wiring you the money or sending a check. If you fall for their sob story, you’ll let someone take your car away, but the money will never be wired, or the check you receive will bounce.
The Overpayment Scam can unfold in different ways. The buyer will say that some other person owes them an amount of money that’s even more than your asking price for the car and say that person will pay what they owe the buyer to you instead. Seems like a no-brainer to avoid this one, and yet it can be presented in ways that all seem very legitimate. Another way this one happens is when an overseas person says they’ll pay you for the car as well as the cost of shipping it to them overseas. They either send a bad check or promise to wire money that never materializes.
The Payment Plan Scam: Everyone’s used to making monthly car payments, so when a potential buyer says they want to pay you in monthly installments, it can seem like a legitimate request. But you’re just a person, not a financial institution, which means you have zero leverage or legal enforcement mechanisms at your disposal if the person doesn’t make the payments.
The Escrow Scam: A third-party escrow company holding the money for you sounds legitimate, right? But enterprising criminals have gone to great lengths to make fake escrow agencies look legitimate. There’s no need to use an escrow company if you do an in-person transaction at your bank or the buyer’s bank.
Identity Theft: Any buyer who starts asking you for personal information, such as your bank account information, social security number, or credit card number is not a legitimate buyer, no matter what tale they spin that makes it sound legitimate. They’re really trying to steal your identity and empty your bank account or run up your credit card to its limit.
Like we said before, protecting yourself from being scammed when selling your car means keeping an eye out for these kinds of red flags, and being more skeptical than trusting. But if you do find you’ve been scammed, here’s what to do about it in three easy steps:
Step 1: Quickly Document What You Know About the Scammer
You’re going to report this scammer to the police, but they’re going to want a lot of information from you, so first gather up what you know about the person who scammed you. You were obviously in touch with them to talk about the car, and maybe even met up in person for a test-drive or to do the transaction. If you know any of the following, the police will want this information:
Scammer’s Name: Maybe they gave you a fake name, maybe they used their real name, but either way you want to do your best at identifying the person who scammed you.
Scammer’s Identity: We’ve recommended that before letting a private buyer test-drive your car, you should take a snap-shot of the person’s driver’s license with your phone or meet at a place where you can make a photocopy of it. This will be hugely helpful to the police if you
Scammer’s Contact Information: Did they get in touch with you online? Do you have an email address for them? How about a phone number? Either or both will be helpful to the police.
What the Scammer Did: Did they give you a forged check? Counterfeit cash? A personal or other check that bounced? Make sure you have the details of what happened from your bank in order to give as much information to the police as possible.
Step 2: Alert the Police!
You want to file a report about the incident as quickly as possible with the police. Look up the non-emergency number for your local police department (do not use 9-1-1) or stop by in person to report the incident. If someone tried to pay you using money they knew was counterfeit, that’s a serious felony that can result in a $15,000 (or more) fine and up to 15 years in prison! If a check was forged or faked, this is another serious crime. Depending on the amount involved, in the state of California it could be classified as a misdemeanor (with a fine up to $1,000 and up to a year in jail) or as a felony. A felony forgery conviction could result in a much larger fine up to $10,000 and up to 3 years of jail time. In California a check forgery is only going to be classified as a misdemeanor if the total amount involved is less than $1,000.
Step 3: Contact Your Bank About What Happened
If you deposited a check from the buyer with your bank, you’ll know within a day or two whether or not it cleared. If it bounces, then chances are good you’re a victim of being scammed. Be sure to notify your bank about what happened and that you have filed a report with the police and ask them to reverse any fee they have charged you for a returned check.
Sell Your Car to Driveo and Avoid Being Scammed
If you want to ensure you won’t inadvertently become the victim of scammers when selling your car, take the safe route and sell it to Driveo! Our process is quick and easy, which means you’ll know in a matter of minutes what we’re willing to pay for your ride. In fact, selling to Driveo is every bit as fast and secure as trading your car in to a dealership but will put more money in your pocket. Why? First of all, because we are always on the lookout for great cars we can buy directly from owners and are willing to pay more than most dealerships would ever offer on a trade-in deal. Secondly, our quote is good for a full 30 days, which means you can shop around to see if someplace else will offer you more. All we ask is that if you do get a better offer, please give us a chance to beat it by using our Upload an Offer page. You can learn more about how it works on our Why Driveo page or go ahead and get started now. We think you’re going to love how easy Driveo makes it to cruise in and cash out!