Delaware Attorney General Kathy Jennings and the Delaware Department of Justice’s Consumer Protection Unit (CPU) recently alerted consumers about several fraudulent and problematic practices in online car sales.
“As the pandemic, hopefully, continues to wane, demand for cars is skyrocketing,” said Jennings. “This high demand for vehicles has created an opportunity for scammers to exploit Delaware consumers looking to purchase a car. Consumers should exercise caution when purchasing a car online, particularly when they lack the ability or opportunity to inspect that car before the purchase. If you’ve been defrauded, resources are available to help. Call our consumer protection hotline at 800-220-5424.”
Officials said the DOJ’s Consumer Protection Unit is aware of several issues surrounding online car buying of which consumers should be aware. One of the most egregious concerns, they said, is phantom companies that never deliver the car the consumer thought they purchased. That, they said, happens when a consumer locates someone online purporting to be a dealership selling a vehicle. After never receiving the car, consumers learn that the dealer they thought they had been communicating with does not actually exist.
Another concern, officials said, is online sellers who lie about the quality of their cars. In these cases, a consumer does receive the car they purchased online, but it is in considerably worse condition than advertised. Without the benefit of an in-person inspection, consumers are left to rely on pictures and other disclosures that may be false, they noted.
Other related issues include:
• Online car sellers not being licensed in Delaware to sell vehicles in the state, as required by state law.
• Delaware consumers not receiving the title to a purchased vehicle in a timely manner, forcing consumers to repeatedly seek temporary tag authorizations. While the issuance of a single temporary tag can and often times does occur as part of the normal purchase process, officials noted, the issuance of multiple temporary tags by the seller while the title paperwork is “processed” can be cause for concern. The issuance of multiple temporary tags can be a sign that the seller did not have physical possession of the title at the time of sale, a practice that is illegal under Delaware law.
Officials suggested a number of steps to help consumers protect themselves:
• Exercise caution when purchasing a car online, particularly where you cannot physically inspect the car or where the pictures advertising the car show limited portions of the vehicle.
• If you are unable to physically inspect the car, demand the opportunity to arrange for a mechanic local to the seller to inspect the vehicle and produce a report on any issues identified. If arranging an inspection by a local mechanic is impossible, demand to receive pictures of the vehicle that show as many of the car’s components as possible, such as the undercarriage, the engine, the engine well, the exhaust system, all doors, all exterior panels, and all windows.
• Confirm that the dealer is licensed with the Delaware Division of Motor Vehicles by searching the DMV’s online database of licensed dealers at https://www.dmv.de.gov/dealerships/index.shtml.
• Look up reviews on the dealer through websites such as the Better Business Bureau, at https://www.bbb.org/local-bbb/bbb-serving-delaware.
• Confirm that any dealer you are purchasing from has physical possession of the title to the vehicle they are selling, as required by Delaware law, and to ensure there are no delays in obtaining the title following your purchase.
• Ideally, ask to see the titles so that you can confirm the VIN on the title matches the vehicle you are purchasing. Also, inspect the blocks located on the front of the title for designations like “flood,” “salvage,” “rebuilt,” “reconstructed” or “restored salvage,” or letters or numbers representing those designations, as some other states use. The designations are designed to inform consumers that the vehicle has at some point suffered severe, perhaps irreparable, damage.
Anyone who has purchased a car from a phantom seller or that has severe, undisclosed issues please contact the Fraud & Consumer Protection Division online at https://attorneygeneral.delaware.gov/fraud/cmu/complaint/ or call 1-800-220-5424. Anyone who has identified an unlicensed dealer of vehicles operating in Delaware or have experienced a delay in receiving the title to your vehicle, complaints can be filed with the Compliance & Investigations Unit at any of DMV’s four locations throughout the state.