BBB warns of recent cases of phony businesses
The Better Business Bureau of Minnesota and North Dakota (BBB) is urging consumers considering an online car purchase to be extra cautious following three recent incidents involving bogus auto dealer websites, each claiming to be located in North Dakota.
This scheme was first brought to light by the BBB in our area in late 2011 — when another bogus online entity claimed to be operating an auto dealership in Southern Minnesota — and it appears to be spreading.
“Buying a car online calls for a considerable amount of due diligence,” said Steve Farr, auto industry liaison for the BBB of Minnesota and North Dakota. “But even as consumers are doing their homework on a particular vehicle, they should research whether the ‘dealer’ itself is what it seems — particularly when purchasing from an unfamiliar dealership in another part of the country.”
In the three most recent cases investigated by the BBB, the ‘hook’ used to entice customers was similar — authentic-looking used auto dealer websites featuring high-end luxury cars such as Ferraris and Bentleys, often priced thousands of dollars below typical book value. Each site claimed a physical address in North Dakota, and provided one or more North Dakota phone numbers for people to contact.
Last October, a Connecticut consumer alerted the BBB to a website purporting to be ‘Wieser Autos,’ on Seventh Street South in Fargo, N.D., (this is not to be confused with Wieser Auto Sales, a legitimate used car dealer in Wahpeton, N.D.). The BBB’s investigation revealed that no such dealer was licensed in North Dakota, and that many of the website’s auto listings were lifted directly from online inventories of legitimate car dealers around the country. The Fargo address the phony company claimed actually belonged to an unsuspecting business not connected with the shady website.
The BBB immediately contacted the web provider hosting the bogus website, reporting its findings and urging the provider to suspend the site. The website was taken down within a few days, although the BBB subsequently learned of a victim in California who sometime in the weeks prior had wired away over $23,000 to scammers for a truck he never received.
In November, the BBB received a complaint from an Illinois consumer about a website claiming to be ‘Golden Motor Group’ on Morrison Ave in Bismarck. The BBB once again determined that listed vehicles actually belonged to other, legitimate dealerships, and that the address listed was a rented storage locker. The BBB was again able to have that website shut down. Unfortunately, the consumer who reported the scam had already wired away $32,000 for a sports car that was never delivered.
The most recent example of this scam came in February, when a consumer in Hawaii contacted the BBB about a website purporting to represent ‘Nationwide Motor Center,’ with an address on North Fourth Stree in Grand Forks. Once again, the BBB was able to establish that the dealership and its inventory were non-existent, and the web provider quickly opted to shut down the site when presented with these findings.
One new ‘twist’ in the Grand Forks case was that the consumer first encountered ‘Nationwide Motor Center’ through a listing on Cars.com, a legitimate auto advertising and research site. A contact claiming to be a private individual indicated she was consigning her truck due to ‘financial hardship,’ and urged the consumer to contact ‘Nationwide’ about the purchase. Thankfully, the consumer’s instincts told him to cut off communication with the ‘consignor,’ and he alerted the BBB.
In light of the spread of phony auto dealer websites, the BBB offers the following tips to consumers considering an auto purchase online:
• If the deal sounds too good to be true, it probably is. In each example of this scheme, cars were advertised at prices substantially below book value for comparable vehicles. Use online resources such as Kelley Blue Book to get a sense of how much you might realistically expect to pay for a used car.
• Research the dealer, just as surely as you’d research the car. Visit www.BBB.org to verify that the business has a listing and complete contact information. Ensure that the business is licensed as an auto dealer in the state. In North Dakota, dealer licensing is administered through the Department of Transportation. In Minnesota, the Department of Public Safety handles dealer licensing, and maintains a ‘Dealer Lookup’ page on its website.
• Do a little Internet ‘detective work.’ If the vehicle listing provides a vehicle identification number (VIN), do a simple Google search to see if that same listing appears elsewhere on the web. If you see it listed in the inventory of another dealership elsewhere in the country, you’ll know something is amiss.
• Watch for geographic and other visual inconsistencies. Many of the vehicle photos on the three websites referenced above clearly showed palm trees and mountain ranges in the background, something not typically seen if a vehicle is photographed and available for sale in North Dakota. Other photos were clearly stock images, and not actual vehicle photos.
• If a purported dealer attempts to rush you into sending money to ‘hold’ a car or hesitates when you ask if you can see or inspect the vehicle, move on. The BBB urges consumers not to send money for an online vehicle purchase without having an opportunity to see the vehicle first, or to have it inspected by a third-party inspector of your choosing.