Online vehicle sale fraud; Wisconsin DMV warns consumers

MADISON, Wis. - The Wisconsin Department of Transportation (WisDOT) Division of Motor Vehicles (DMV) noted on Monday, Feb. 24 a troubling trend in the number of scams by vehicle sellers posing as car dealers online. 

DMV’s Dealer and Agent Section tracks this activity, investigates consumer complaints and offers tips to customers.

How the scam works

What they're saying:

DMV Dealer and Agent Section Chief Maura Schifalacqua talks about how the scam is played out.

"The fraud scheme starts online as a fake storefront. An individual creates a website or a social media profile claiming to be a Wisconsin dealership. Stock images or photos of real vehicles and real Wisconsin dealerships are included to make the website seem legitimate. However, there is nothing legitimate about it. The advertised vehicles may be listed at below market value causing interested consumers to take the bait."

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There are similarities with each case known as dealer cloning: fake websites or social media pages, cars priced below market value, and no in-person contact with the seller. Wisconsin DMV is aware of multiple cases that follow this pattern, with fraudulently created websites or Facebook profiles alleging to be legitimate Wisconsin dealerships.

"In one case, the business never existed," Schifalacqua said. "In many cases, the fraudster interacts with the consumer by phone or email. The buyer might receive a bill of sale and several photos of a vehicle and agree to purchase by wire transfer, believing the seller will ship the car to them. After the wire transfer is completed, the seller stops all contact, and the customer eventually realizes they’ve become a victim of fraud."

Tips of consumers

What we know:

WisDOT recommends taking the following precautions to keep safe while buying a vehicle from a dealer:

• Watch for numerous spelling or grammatical errors on the seller’s website or manipulated photos of a business or vehicle. This could tip you off to a cloned dealer site or unprofessional (and possibly unscrupulous) dealer.
• Research the dealership ahead of time including verifying phone number, address, email and other contact information.
• Review WisDOT’s active dealers list to verify licensed dealers, wisconsindmv.gov/dealerlist. The list includes motor vehicle dealers and motorcycle dealers who are properly licensed to sell. This list is updated daily and readily available to the public.
• Review vehicle purchasing information on WisDOT’s website.
• Visually inspect the vehicle before buying and inspect the required Wisconsin Buyer’s Guide.
• Ensure the selling dealer uses a Motor Vehicle Purchase Contract as required by Wisconsin law.
• Refrain from sending money by purchasing gift cards or other suspicious payment methods encouraged by the seller.
• If you wish to make a wire transfer to the seller’s bank, independently verify the bank’s contact information. You may inform the bank you wish to verify the legitimacy of the seller before sending a wire transfer.
• If something doesn’t feel right, walk away from the purchase.

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What if you become a victim? 

What you can do:

If you are the victim of a scam involving a motor vehicle sale, you may:

• Speak to WisDOT’s DMV Dealer and Agent Section by filing a dealer complaint: wisconsindmv.gov/dealercomplaint 
• Report internet-based crime:  www.ic3.gov
• Consider filing a police report with the local law enforcement agency where you reside.
• Speak to AARP’s Fraud Watch Helpline and find Fraud Victim Support Groups (all ages accepted):  https://www.aarp.org/money/scams-fraud/fraud-victim-support-group/?cmp=RDRCT-CSN-FRD-NEW-SUPPORT_GROUP_PAGE
• Request a free credit report and research identity theft prevention:  https://www.annualcreditreport.com/index.action