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Escrow online car fraud

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X-Ray production team X-Ray production team | 09:00 UK time, Wednesday, 19 May 2010

The growth of the internet means we've had to learn lots of new terms for things we never even knew existed, and now there's a new one for our dictionaries: Escrow.

Though it sounds high-tech, Escrow services have been used since the 16th century, where a trusted third party would be enlisted to hold the money while the exchange took place in the sales of goods or property - often when a scroll containing the deeds was handed over.

Now the world is a very different place and scammers are using technology to fake the legitimate service to con unsuspecting victims.

Scammers are using technology to fake the legitimate service to con unsuspecting victims.

Matthew Curtis, a steel worker from Barry, wanted to shop around for a good deal when the time came to upgrade his trusty Mercedes. He and his wife Dawn had saved hard for months and went online in search of some dream wheels suitable for the highways and byways of the Vale of Glamorgan.


Matthew and Dawn Curtis

Matthew explained: "The car I found was a Mitsubishi Warrior 4x4 L200 and it had a cab on the back as well, which I thought would be ideal for the dogs. It was a bargain and it was lovely, owned by a lady and she said she'd looked after it."

Matthew's wife Dawn added: "The lady on the internet then got back to us to say she'd recently got married, moved to Italy, was still wanting to sell the car because it was so expensive in Italy to register it and to have it changed from right hand drive."

"We were really excited at this point, but we were a bit nervous because it was in Italy and obviously we couldn't see it before we bought it."

According to the experts, a detailed back-story is often used by fraudsters trying to sound like they have a legitimate reason for selling a car at a rock-bottom price.

Matthew and Dawn had seen the advert on a website for car enthusiasts. In their classified section, PistonHeads.com warns potential victims of the risks involved in buying a car from someone you've never met.

The couple were worried about not seeing the car before the purchase, but were advised by the seller that she'd previously worked in the car industry and there was a way they could buy with no obligation: Escrow.

Dawn added: "She sent us the paperwork, which was the PistonHeads paperwork so everything looked like it was really legitimate. At that point we were really excited. We thought we were having a bargain, it was a car we really wanted and we were excited about everything going through so easily and it seemed really safe."

The email Matthew and Dawn received stated there was £5,000 in a Pistonheads Escrow site. So if the car didn't arrive, or wasn't exactly what Matthew and Dawn were expecting, they thought they'd be able to get their money back. What they didn't realise was that the message was a complete fake.

Convinced that the documentation they'd received was genuine, Dawn sent £3,500 to the seller's bank account, and waited for their dream car to be delivered. As the delivery day came and went, there was no sign of the car and they hadn't heard from the seller, Matthew and Dawn realised they'd been conned.

The couple had been convinced by the emails they thought came from the PistonHeads website. At the genuine PistonHeads HQ, they're keen to clear up confusion about escrow sites.

Stuart Forrest, publishing director at PistonHeads, said:

"What the scammers are doing is borrowing our logos and our websites to give an air of legitimacy to the service and that's designed to convince someone who may be a little uncertain about the story that they're being asked to buy into that it's genuine.

"What we would say is none of these websites offer any kind of payment service, any kind of transaction or shipping service and if you have any sort of communication like this, no matter how legitimate it might look, take it as a reason not to go ahead with the purchase and also, crucially, report it to the website concerned."

PistonHeads has teamed up with other advertisers and the Metropolitan Police to form VSTAG, the Vehicle Safe Trading Advisory Group, whose aim is to stamp out fraud related to car sales.

VSTAG are working with the DVLA to develop systems to check if people advertising cars are entitled to sell them, but in the meantime, buyers have to rely on a few simple dos and don'ts, and a healthy dose of scepticism.

If you're considering buying a car you've seen advertised online, here are some of the essential tips from VSTAG:

  • Never wire money abroad for a vehicle.
  • Check the market value of the vehicle.
  • See the car and meet the seller (don't just rely on email communication). Check that VIN/chassis numbers on the vehicle to make sure they match each other.
  • Do a vehicle history check and use it to make sure the VIN/ chassis number tally with the registration number of the vehicle.
  • Check the paperwork V5C, MOT certificate and service history. Make sure all the documents are originals.
  • If it looks too good to be true - it probably is. Be prepared to walk away from the deal if you have any doubts.

For more detailed advice, including information on current scams like Escrow frauds, visit the VSTAG website, and browse advice on the PistonHeads.com website.


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