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Mark Bardsley was on the hunt for a second-hand car when he came across what seemed to be a decent deal on a trusted and popular car-sales website back in October.
It was exactly what he had in mind and, better yet, it was well within his budget.
Selling for $17,000 was a four-year-old hatchback with just under 30,000 kilometres on the clock.
Having previously owned a second-hand car, the 40-year-old from Brisbane firmly believed buying a recent model with low mileage was better value than buying a brand-new vehicle.
"It wasn't ludicrously cheap, but it was a bit of a bargain compared to some of the other options available," says Mr Bardsley, who had been looking for a replacement after his last car was written off.
The seller described the car as being "in excellent condition, runs and sounds 100 per cent perfect with no leaks or noises".
Mr Bardsley messaged the seller to request an inspection, only to find out she had engaged a broker to manage her sale.
Acknowledging car brokers "do exist although [are] not very common", he was not too worried about going through a third party.
The seller then offered two ways to go about the purchase.
She could help set up an appointment for an inspection at the broker's warehouse, but Mr Bardsley would need to present a negative result on a COVID-19 test taken within 72 hours of his visit.
Alternatively, he could opt for a contactless delivery which would require him to create an online account on the broker's site.
Once registered, the broker would deliver the car to his address, at no added cost, and Mr Bardsley would have it in his possession for 48 hours.
In that time, he would be allowed to inspect the car, take it for a test drive, and take it to his mechanic for a service.
The seller also highlighted the broker had a "live chat on the website" to help with "any other questions about the car or the process" should he need added support.
After contacting the broker, Mr Bardsley was told the car would be held at a warehouse in Brisbane.
But quoting concerns about the COVID-19 pandemic and other ongoing illnesses, the broker said in-person viewings were temporarily unavailable, leaving Mr Bardsley with no option.
So, he proceeded to create an account on the broker's website, which required him to provide 100 points of ID and consent to it the broker's terms and conditions.
As soon as his account was verified, the broker proceeded with the transaction and sent him a shipment bill that contained a tracking number, allowing him to monitor the progress of the delivery.
In the same email, he was also issued an invoice for $17,000 and was instructed to pay the amount into an escrow, or third-party account, which would allow the broker to hold the funds until the sale was finalised.
"It all sounded wrong … I hadn't even seen the thing yet," said Mr Bardsley, who pushed back on making the payment.
The broker insisted it was for his own protection – to weed out non-genuine buyers and minimise the risk of damage.
Alarm bells started ringing for Mr Bardsley, prompting him to look more closely at the broker's company.
The broker's phone number and office address were both listed on the website but they did not match up.
Mr Bardsley called the number, which had a north-east Queensland area code, but it did not ring on several attempts.
When he plugged the office address into Google Maps, he was directed to what appeared on Street View as an empty plot of land in Victoria.
He also revisited the terms and conditions he signed when creating his account with the broker.
It turned out, he had agreed to pay upfront for the car and had accepted to bear any penalty costs for backing out of the sale.
When he challenged the seller, he said he was met with an aggressive response that was riddled with typos and outlined a legal threat.
Are you kidding me? Why did you want to start the transaction ? Do you know that the company will not refund my fees ? Also you are subjected to pay a early cancelation fee that will cost $500 plus refund of my fees 985$ you agreed all of this when you confirmed your account on sing up. If you don't pay this I need to escalate the transaction to the legal authorities and open a court . My lawyer will take care of all of this. We don't play @ here with people money and time . What is this ????
Following his discoveries, Mr Bardsley suspected the seller had been involved from the start so he stopped engaging with her.
He said the broker's website was removed from its server soon after the confrontation.
Without hesitation, he reported the incident to both Scamwatch and the car sales website which hosted the ad.
The ad has since been taken down from the car sales website too.
A spokesperson from the Australian Competition and Consumer Commission (ACCC) said Mr Bardsley had done the right thing by spotting the signs of a scam and reporting it to both Scamwatch and the online marketplace involved.
The spokesperson said Scamwatch had received other scam reports about online sales similar to what Mr Bardsley described.
How common are used vehicle scams?
James Voortman, the CEO of Australian Automotive Dealer Association (AADA), says there has been strong demand for used cars since the COVID-19 pandemic affected the supply of new cars.
While prices of used cars still sit above what they were before the pandemic, he believes used cars will remain in high demand.
"We probably don't see that coming off for some time," Mr Voortman says.
A spokesperson from the ACCC says Scamwatch received 1,920 reports about second-hand vehicle scams last year.
Those scams saw 398 individuals lose more than $2.9 million in total.
For most states, the end of last year saw an increase in the number of scam reports lodged.
In states such as New South Wales, Victoria and Queensland, the number of reports also peaked in the first half of 2022, around the time major floods were happening.
Mr Voortman, who stays across the ACCC's reports, says scams are increasingly rife in the used-car market.
"These mainly [are carried out] by private individuals who are operating on classified sites on social media or other publications," he says, adding dealers risk losing their licence if they are caught running scams.
While it is hard to say for sure if growth in scam activity follows increased demand for used cars, Mr Voortman believes there may be a link.
"A lot of people are desperate to get used cars, and scam artists always feed on the desperation of vulnerable people, so it wouldn't be a surprise if those people looking to make money by illegal means have factored in the current environment," he says.
As an IT professional, Mr Bardsley considers himself tech-savvy enough to spot a scam from the onset.
However, he says it has become tedious to avoid falling for scams because they are increasingly sophisticated.
"They are relying on plausible social scenarios where I feel like I'm dealing with a person, and they look legitimate and ask me legitimate things," he says.
He may have dodged losing a large sum of money, but he worries about the implications of the scammer having his personal details.
He shared his experience with the ABC so other people would be wary when making purchases from private sellers and take their time to suss them out.
What are other common vehicle scams going around?
"Vehicle scams are commonly hosted on sites such as Facebook Marketplace, Autotrader, Car Sales, Car Guides and Gumtree," the ACCC spokesperson says.
She says there are two types of scams to look out for: fake sellers and fake buyers.
Making up 70 per cent of second-hand vehicle scam reports, fake sellers put up advertisements selling vehicles they do not possess.
Common tactics include:
- Scammers pretending to be a defence force member who needs to sell their vehicle before they are deployed somewhere, creating a sense of urgency with buyers and justifying prices lower than market value
- Scammers claiming they were awarded a vehicle through a divorce settlement and would like to sell it
Fake buyers, on the other hand, approach legitimate sellers from states and territories other than the one they are based in.
Here's what a common scenario looks like:
- Once a deal has been made, a scammer claims to have arranged a bank transfer plus transport of the vehicle via a courier service, which may include insurance
- However, they will later backtrack and request the seller cover the courier or insurance payments, claiming they can reimburse them the cost in their payment for the vehicle
- Once the seller pays the courier fee, usually to a third-party bank account, the scammer halts communication and avoids all contact with the seller
How to protect yourself from a vehicle scam?
The ACCC has this advice:
- Don't rush into deals that seem too good to be true
- Do an internet search using the exact wording in the ad
- Be wary of purchasing a vehicle that you are unable to inspect
- Don't trust the legitimacy of an ad just because it appears in a reputable source
- Be wary of transactions that involve an overpayment, and requests to refund the excess money
- Do not send the item on sale to the buyer until the cheque or payment has cleared in your bank account
If your personal details have landed in the hands of scammers, such as in Mr Bardsley's case, the ACCC spokesperson has the following advice:
"Anyone who is concerned about ID theft and has given personal information to a scammer should contact IDCARE."
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