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.
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 4th St 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:
1) If the deal sounds too good to be true, it probably is.
2) Research the dealer, just as surely as you’d research the car.
3) Do a little Internet ‘detective work’.
4) Watch for geographic and other visual inconsistencies.
5) 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.