Better Business Bureau Serving Metropolitan New York is advising consumers to exercise caution when purchasing vehicles—especially boats—through online marketplaces. Problems with such sales have cropped up in offers made via channels such as Craigslist or eBay. Consumers who fall for this scam can lose huge sums of money.
In recent weeks, 12 consumers have reached out to your BBB® about two different companies, both purporting to be based in Manhattan, allegedly offering fraudulent boat sales through online ads.
“We’ve seen these kinds of transactions before,” said CEO Claire Rosenzweig. “The frequency at which we are receiving reports from consumers who have encountered what they thought were legitimate offers only to have them turn into losses, is concerning and therefore we are alerting people to this issue so that they can take steps to protect themselves.”
Last autumn, the International Association of Better Business Bureaus (IABBB) reported on a category of fraud called Virtual Vehicle Vendor Scams, through which scammers, via online ads, solicit consumers to purchase vehicles that never actually arrive. Frequently, the cybercriminals behind these scams handle consumer skepticism by creating fake escrow companies they claim will handle the transactions, or by making false statements about the purchases being guaranteed by the websites where they advertise.
Another hallmark of this scam is that sellers attribute their below-market prices to bogus stories about the vehicles being associated with recent divorces, late relatives, or military deployments.
Now, the Metro New York BBB is fielding reports from consumers alleging to have paid tens of thousands of dollars for boats they never received.
One complainant, who claimed to have done business with United Motors Garage LLC, rated F by BBB, explained: “[the company] sent me a bill of sale for the boat then reported the boat damaged in shipment and promised to return my money...they have never refunded my money and I have lost $26,000.”
Other consumers reported nearly identical stories with similar losses when doing business with the company, which claims to be located in Manhattan.
Meanwhile, two more would-be boat buyers, as well as a consumer shopping for a construction vehicle, submitted recent BBB Scam TrackerSM reports about a different purported Manhattan business called ZylanMotors. According to their reports, all three judged that offers made by this business could be fraudulent before sending payment.
Another consumer filed a complaint with BBB in mid-October alleging that he incurred over $15,000 in losses after interacting with ZylanMotors. BBB has sent that complaint to the contact information on record for ZylanMotors, but, to date, BBB has not received a response to the consumer's dispute.
BBB Metro New York was unable to find registrations with the New York Department of Motor Vehicles for either company—a requirement for boat dealers in the state.
According to Susan Cuomo, Director of Information and Investigations for the Metro New York BBB, the reports described above are typical for the kind of fraud they allege.
“Virtual vehicle vendor scams move fast and hit for high amounts of money,” said Cuomo.
BBB Metro New York offers the following tips to help consumers avoid virtual vehicle vendor scams:
- Watch for red flags, such as:
- The price is significantly below typical market cost.
- The seller is unwilling to meet for a vehicle inspection in person.
- Payment must be sent to a supposed third party recommended by the seller.
- Payment must be sent via gift card or bank-to-bank wire transfer
- Perform an internet search for the photo of the vehicle in case the photo may have been copied from another posting by a fraudster. You can also do an online search using an interesting sentence in the ad or the seller’s contact information to check whether there are online complaints associated with that information.
- Use Whois to check on how long the website for an escrow or shipping company has been active and verify that the time frame is consistent with the company’s online claims.
- Avoid paying for a vehicle through money transfer companies such as Western Union, MoneyGram, or with a prepaid gift card, or other payment method that might make recovery of funds difficult or impossible.