Used car buying scams: what you need to know

Victims lost an average £998 in 2023

FRYDEK-MISTEK, CZECH REPUBLIC - MAY 28, 2023: Ford Fiesta 6th generation in green colour, rear view
Vehicle scams surged by 74% in the first half of 2023, according to new research. Photo: PA/Alamy

Car and van buying scams have surged by 74% in the first half of 2023 compared to the previous year, according to a study by Lloyds Bank (LLOY.L).

They have become the most common type of online shopping fraud reported in the UK, particularly affecting individuals between the ages of 25 and 34, with an average loss of £998 per victim.

One of the nation's favourite cars, the Ford Fiesta, is the most popular vehicle to be used in scams, the bank said, but BMWs and Audis also feature heavily among the fake ads, with motorbikes and classic cars also cropping up regularly.

Fraudsters create fictitious listings on social media and online marketplaces, often using genuine vehicle images.

When a potential buyer shows interest, they may demand a deposit or even the full payment upfront, accompanied by various excuses for not permitting an in-person inspection.

Pressure tactics such as claiming high demand or imposing tight payment deadlines are used, with victims coerced into sending money via bank transfers, offering little recourse in case of fraud.

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Once the payment is made, the scammer disappears, blocking the buyer and erasing their profile. Some victims are even provided with fake addresses for vehicle collection, leading to wasted journeys and further financial losses.

"Buying a car is among the biggest financial commitments many of us will make, so the sharp acceleration in reports of people being scammed when shopping for vehicles on social media is alarming," said Liz Ziegler, fraud prevention director at Lloyds Bank.

Meta platforms

Lloyds found that 68% of vehicle scams in 2023 originated from two Meta-owned (META) platforms — Facebook, including Facebook Marketplace, and Instagram. Some 15% of vehicle scams happened on online marketplace Ebay (EBAY).

Most major online marketplaces have payment mechanisms that, while not foolproof, act as a deterrent to fraudsters.

Facebook Marketplace, one of the world's largest online marketplaces, appears to lack such safeguards, according to Lloyds.

Read more: Scam adverts still rife on Facebook and Instagram

Lloyds is calling for social media companies to be held accountable for their lax approach to protecting consumers “given the vast majority of fraud starts on their platforms”.

Luke’s story

Lloyds' case study Luke thought he'd found a bargain on Facebook Marketplace — a two-year-old Ford Fiesta for £5,400.

The seller, claiming high demand, pressured Luke to act fast. When Luke asked for more car photos, they didn't quite match the advert, raising his doubts.

Luke checked DVLA records, confirming tax and MOT status, but still had reservations when the seller refused an in-person vehicle inspection.

The seller offered personal information to ease Luke's concerns including a copy of his passport in an attempt to prove he was legitimate.

Luke sent £540 as a 10% deposit and received an email to say that the payment had gone through and an arrangement for delivery would be made.

The account details were under the name of a different individual, who the seller claimed was his "customer support manager".

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Luke didn’t receive the vehicle and the seller's profile disappeared from Facebook. Any attempts to contact him via email were unanswered.

"Buying directly from approved dealers is the best way to guarantee you’re paying for a genuine vehicle, and always use your debit or credit card for maximum safety," said Ziegler.

"If you do want to buy something you’ve found through social media, only transfer funds once the car is in your possession."

The UK Finance‘s Annual Fraud Report for 2023 found that Brits lost a combined £1.2bn across all fraud types last year. The report highlighted how criminals use social engineering to groom and manipulate people into divulging personal or financial details or transferring money.

Earlier this year, MP Anthony Browne, an anti-fraud campaigner, said the UK is facing an "avalanche of scams", and tech giants must step up and protect their users, according to This is Money.

Ford in the spotlight

Buyers interested in the Ford (F) Fiesta model are particularly targeted, according to Lloyds.

Demand for this model surged following Ford's announcement of production cessation a few months ago, making it an attractive target for fraudsters.

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Premium brands like BMW (BMW.DE) and Audi (VOW.DE) also feature prominently in fake ads which appear "to good to be true."

Fraudsters constantly adapt and test the success of fake adverts for a variety of vehicles including motorbikes and vans.

Vans are popular at the moment due to high demand for cheap models to be converted into campervans, reported Lloyds.

The five models reported most often as part of vehicle scams in 2023

The five models reported most often as part of vehicle scams in 2023, according to Lloyds research.
The five models reported most often as part of vehicle scams in 2023, according to Lloyds research. Chart: Lloyds

Lloyds top tips to stay safe from vehicle scams

  • In-person inspection: Never pay for a vehicle you haven't seen and tested in person. Scammers often use social media to advertise non-existent cars.

  • Check documents: Ask for the seller's V5C logbook to verify ownership. Be cautious of vehicles without this document.

  • Trust dealers: Buy from reputable, approved dealers. Organisations like the AA provide guidance for buying cars remotely.

  • Question unrealistic deals: If a deal seems too good to be true, compare prices from trustworthy sources.

  • Use secure payment: When shopping online, always use your debit or credit card for added financial protection.

The government's tackling fraud strategy included committing £100m for law enforcement work in the fight against fraud in an attempt to tackle economic crime.

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