Online vehicle ad scams on the rise

23 Jun 2021

Websites like Facebook Marketplace, Gumtree, Car Sales, etc. are wonderful platforms if you’re looking to purchase a second-hand vehicle, but be aware of car ad scams, which are becoming more and more common.

According to the Australian Competition & Consumer Commission (ACCC), Australians lost $288,459 to car ad scams in the first quarter of 2021, with 346 incidents reported.

This compares to over 1,000 reports and more than $1 million lost in 2020, and 330 reports and about $245,000 lost in 2019. There’s an undeniably upward trend, says ACCC Deputy Chair Delia Rickard.

“As second-hand car sales increased during the pandemic, unfortunately so did vehicle scams. If current trends continue, Australians could lose much more to vehicle scams this year than the $1 million lost in 2020,” ACCC Deputy Chair Delia Rickard said.

“We want to raise awareness of these scams to reduce the number of people who may be vulnerable to them.”

In a typical online vehicle scam, the scammer posts a fake online listing where an in-demand vehicle is advertised at a price much lower than its market value to lure interested buyers.

The scammer then seeks payment for the buyer to secure the purchase, but then never delivers the vehicle.

By far the most common technique (around 97%) involves the scammer pretending to be a member of the defence force – navy, army, air force, etc. – or to work for the Department of Defence.

They’ll tell the buyer that they want to sell their vehicle before an imminent deployment, creating a sense of urgency and also justifying both the unusually low price and the reason that the buyer cannot inspect the car before purchase.

“A price that is too good to be true should be a warning sign for potential buyers,” Ms Rickard says.

“If a classified ad offers a vehicle at a very low price, the ad might not be legitimate. For example, one report noted a listing that advertised a car for nearly $10,000 below its market value to entice buyers looking for a bargain.

“If the seller claims to be unavailable and insists on payment before meeting the buyer or allowing them to pick up their new car, this should raise suspicions.

“It is relatively common for scammers to claim that they are travelling or moving away to avoid meeting buyers before payment.

“Always try to inspect the vehicle before purchase and avoid unusual payment methods. If you have any doubts, do not go ahead with the deal.”

It’s not just money that is being lost to vehicle scams, but also personal information such as addresses, phone numbers and copies of a driver’s licence. To protect your identity, you should never provide personal details to somebody you have only met online. 

“Fortunately, over 80 per cent of people who reported vehicle scams to us managed to avoid losing money by identifying the scam early,” Ms Rickard says.

“We encourage consumers to trust their instincts. If something seems too good to be true, it probably is.” 

For further information about these and other types of scams, visit scamwatch.gov.au.