Four Ways to Avoid Fraud When Selling Your Car
In a digital era in which people buy and sell all types of possessions online, across long distances, it’s understandable that you might feel a bit uncomfortable transferring ownership of something as valuable as a car to someone you don’t know well. Following are the steps you should follow to protect your interests:
Make Sure the Relationship is an Owner-to-Owner Interaction
Disputes between buyers and sellers most often arise when the purchase arrangements involve a third party instead of a single seller and buyer. When the buyer and seller are strangers, it’s particularly important that the seller protects him or herself by asking the buyer for identification, or an insurance card, or both. These documents should be obtained before filling out a bill of sale or transfer of title to ensure they feel more confident their buyer is who they say they are.
If at all possible, you should take care to not only secure but also let the payment clear before moving forward in transferring ownership of the vehicle. If payment is rendered through an online payment system like PayPal or Google Wallet, this means making sure the payment has fully processed and is not pending before the transfer.
If you’re paid with a money order or cashier’s check, you will want to do due diligence to either call the money order issuer or issuing bank, respectively, to verify the authenticity of the particular instrument.
With cash, you might want to actually have the buyer meet you at your local bank, and deposit the funds on the spot to ensure they’re not counterfeit.
If the techniques above are properly followed, you should feel pretty confident that the scenario is free of scams or fraud. Following are two potential red flags to avoid:
Attempting to Buy a Car Without Seeing It First, or from a Significant Distance
While rare cars might generate interest among buyers far away, an average car should not, unless it is priced well below regular retail. If a buyer is interested in a car, especially a unique one, they’re going to most likely want to take a closer look at, or drive in it, before putting up the cash for it.
Fake Payment Instruments, Overpaying, or Requests for Using Escrow Services or Payment Plans
Personally verify the payment through an online wallet, cashier’s check, money order, or cash, with the issuer. That’s because there are so many scams out there from people producing falsified money orders, counterfeit cash, etc.
It may be tempting to escrow the funds, and accept over payment for your car from an ‘eager’ buyer. You may also be asked to make arrangements for a payment plan to ‘help’ the purchaser. These goodwill efforts can mean a loss of your vehicle and funds as well.
If you follow the steps above, you will have taken some of the most important measures to protect yourself from being defrauded when selling your car. If you believe you’ve already been victimized by fraud, then contact the FBI’s Internet Crime Complaint Center to file a complaint.