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How online marketplaces contribute to auto dealership fraud

On Behalf of | Oct 11, 2022 | Dealer Fraud

Being able to research a vehicle purchase online can help consumers make more informed choices. You can look into the safety rating and fuel efficiency of each individual model that you consider. You can explore the reputation of dealerships and review what kind of financing they offer. You can also find listings made by owners selling their vehicles.

For the most part, online accessibility is a net positive for those looking to purchase a motor vehicle. However, there are some downsides to digital vehicle listings. For example, it has never been easier for someone who intends to misrepresent themselves as an owner selling a vehicle to trick consumers.

This form of dealer fraud, known as curbstoning, is easier than ever for salespeople to commit thanks to digital marketplaces and resale apps.

Licensed salespeople should be transparent about their identities

Pennsylvania requires that those who sell cars professionally maintain a license and that they conduct their business in a professional manner, typically in cooperation with an insured dealership. Some salespeople may sell vehicles in poor condition using resale apps and online marketplaces to connect with buyers.

They meet in a public place and transfer the vehicle without making appropriate disclosures or providing any of the protections that the buyer would have if they purchased the vehicle through a dealership. Not only do buyers often end up purchasing the worst vehicles on a dealer’s lot in such schemes, but they may have a very hard time locating the seller later if there are undisclosed issues with the vehicle.

Curbstoning is a common form of dealer fraud that may be actionable if the buyers suffer financial losses. Fighting back against auto dealer fraud can compensate you and possibly prompt a salesperson or dealership to change fraudulent and manipulative practices.

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