The owner of a Classic Car dealership was arrested recently for operating without a license and writing bad checks. The individual had more that 25 complaints levied against him.
Sadly this is just one instance of fraud that we've heard of lately and we will give you more details on that story momentarily.
It never ceases to amaze us how many trusting, gullible or just plain dumb people can be when it comes to buying collector cars - we've even known lawyers to wire money to and individual for a car and then ask us to go inspect it for them - after the seller has their money! Even if you are a lawyer, do you know how much aggravation is involved with trying to get your money back from a seller when you change your mind? You must proceed cautiously when buying a car long distance - especially if the seller is telling you if you don't send him money he'll sell it to someone else. DON'T FALL FOR THIS! If it sells so be it, there will ALWAYS be another car. DO NOT SEND MONEY to a seller until AFTER you have had the car inspected, and then ONLY a small deposit and ONLY after you have the agreement in writing. If you need help in these areas check out these two sites: www.AutomobileInspections.com and www.BuyerServicesInternational.com
Although buyers are at risk, so are sellers sometimes. One of the more prevalent scams going on right now is to stop or bounce checks. It works like this; The buyer goes to the sellers house and looks over the car - he then agrees to buy the car and gives the seller a personal check telling him it's good and that to prove it he can call the bank to have them verify it's good over the phone (which at that point in time it is).
The seller then gives the buyer the car and the title and lets him drive away. The buyer then heads straight to his bank and promptly removes all the money form his account. (This can even be done electronically now from any computer) Typically this scam will happen late in the week, so the seller doesn't find out the check is no good until several days later when the thief is long gone. To make matters worse, many insurance companies won't pay out under these circumstances because the car was given up willingly!
Some sellers have been in this situation but thought they were protected because were handed a 'Cashiers check', WRONG! Cashiers checks CAN be stopped, ask your bank. There are also some damn good counterfeit checks out there - with today's technology they can make them convincing enough to fool a bank manager - and when your bank calls the telephone number for the bogus bank the check is drawn on to verify it - guess what, they're calling the buyers girlfriends cell phone!
Another way that sellers are getting scammed is like this. A would be buyer shows up at your house in a nice car. He looks yours over and asks if you'd let him take it for a test drive. You feel comfortable because his car is in your driveway so you throw him the keys. He takes off never to be seen again, you call the police who come round and inform you that the car that is in your driveway was stolen also. The final one we know of is the email or phone call that comes from an overseas buyer, they say that they will send you an international money order for the amount of the car and that their brother will come to pick up the car. When the check arrives, it's for too much money perhaps $10,000 too much. You naturally inform them and they say that you should cash the check and give the balance to their brother when he comes to get the car. Next morning the brother shows up, you've deposited the check, so you give the car away and the $10,000 over payment. The buyer drives away and of course a day or two late the money order bounces.
These scams are happening more on high-end cars, but don't think it couldn't happen to you
We also heard of an English gentleman that purchased two rare old Bentleys for several hundred thousand dollars. He had the cars checked out before he bought them, but he opted to make his own long distance shipping arrangements. Well when the cars showed up in England the two Bentleys Were NOT the two cars the Englishman had bought. The seller had switched id tags. So the cars had the right numbers of the cars the brit had bought, but these were the cars.
How can you protect yourself in these transactions - well the buyer should ALWAYS get a car inspected by a company like Automobile Inspections, LLC and if you do decide to go ahead and complete the purchase, use the services of a company like Buyer Services International LLC for a few hundred dollars you can use their experience to guide you through the process without getting burned.
Back to the collector car dealer that got arrested, His name was Gerry Black; he owned a dealership in Salt Lake City called Déjà vu Collector Cars Inc. Gerry would take cars in on consignment and sell them for a commission. The only problem was when Gerry sold the cars - he never gave the money to the people that owned them! His facility is now shut down (still with 25 cars in the showroom), he's been ordered to stop selling cars and repay those he owes money. Black has said that he plans to resolve the customer complaints and resume operating his business, but the Salt Lake City District Attorney stopped short of saying "over my dead body". Besides the possible criminal charges Black faces, his former dealership has 15 civil suits stacked up against it.