Troubling Form Of Vehicle Sale Fraud Now Increasing In Wisconsin

Anyone who has gone through the experience of purchasing a vehicle knows how stressful it can be as it's a big financial commitment that you hope won't end up costing you a lot more in repairs down the road.

That's why, most people do a lot of research before purchasing any vehicle. The last time our family bought a car, I did a lot of online research on the make and model, checking things like fuel economy, crash test results, average price points, and things of that nature.

While a lot of research can be done online, it's also where a lot of auto purchase fraud takes place and it seems to be on the increase in Wisconsin, prompting a public warning from the Wisconsin Department of Transportation Division of Motor Vehicles (DMV).

Online Vehicle Sale Fraud On The Rise In Wisconsin

It can be very convenient to purchase a vehicle online, but you have to be careful because scammers are getting better at tricking people and taking their money.

The Wisconsin Department of Transportations DMV's Dealer and Agent Section tracks this fraudulent activity including consumer complaints, dealer inspections, unlicensed dealer investigations, and title and odometer fraud.

Recently, they've noticed a troubling trend in the number of scams by vehicle sellers posing as car dealers online.\

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In 2024, DMV’s Dealer and Agent Section’s Field Investigation Unit investigated 1,259 consumer complaints and returned approximately $1.7 million to car buyers.

According to DMV Dealer and Agent Section Chief Maura Schifalacqua, criminals begin their scheme by creating a fake storefront online. “An individual creates a website or a social media profile claiming to be a Wisconsin dealership. Stock images or photos of real vehicles and real Wisconsin dealerships are included to make the website seem legitimate."

With a convincing, but fraudulent online presence in place, they will then entice potential victims by listing vehicles at prices below market value. Once buyers take the bait the fraudster will interact with them by phone or email.

Schifalacqua says that a buyer might even receive convincing documentation such as a bill of sale and several photos of the vehicle, with the agreement that the vehicle will be purchased via a wire transfer. Once the wire transfer is received, the fraudster agrees to ship the car to the buyer.

Of course, once the wire transfer is completed, the seller stops all communication with the buyer, revealing the fraud and ultimately stealing all the money from the buyer.

These schemes, known as dealer cloning, all have the following similarities:

Fake websites or social media pages
Cars that are priced below market value
No in-person contact with the seller.

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The Wisconsin DMV is aware of multiple cases that follow this pattern, with fraudulently created websites or Facebook profiles alleging to be legitimate Wisconsin dealerships.

Tips To Avoid Becoming A Victim Of Dealer Cloning Fraud

The Wisconsin Department of Transportation recommends taking the following precautions to keep safe while buying a vehicle from a dealer:

Watch for numerous spelling or grammatical errors on the seller’s website or manipulated photos of a business or vehicle. This could tip you off to a cloned dealer site or an unprofessional (and possibly unscrupulous) dealer.
Research the dealership ahead of time including verifying phone number, address, email, and other contact information.
Review WisDOT’s active dealers list to verify licensed dealers, wisconsindmv.gov/dealerlist. The list includes motor vehicle dealers and motorcycle dealers who are properly licensed to sell. This list is updated daily and readily available to the public.
Review vehicle purchasing information on WisDOT’s website.
Visually inspect the vehicle before buying and inspect the required Wisconsin Buyer’s Guide.
Ensure the selling dealer uses a Motor Vehicle Purchase Contract as required by Wisconsin law.
Refrain from sending money by purchasing gift cards or other suspicious payment methods encouraged by the seller.
If you wish to make a wire transfer to the seller’s bank, independently verify the bank’s contact information. You may inform the bank you wish to verify the legitimacy of the seller before sending a wire transfer.
If something doesn’t feel right, walk away from the purchase.

What You Should Do If You Become A Victim Of A Vehicle Purchase Scam

If you are the victim of a scam involving a motor vehicle sale, you may:

Speak to WisDOT’s DMV Dealer and Agent Section by filing a dealer complaint: wisconsindmv.gov/dealercomplaint
Report internet-based crime: www.ic3.gov
Consider filing a police report with the local law enforcement agency where you reside
Speak to AARP’s Fraud Watch Helpline and find Fraud Victim Support Groups (all ages accepted).
Request a free credit report and research identity theft prevention: https://www.annualcreditreport.com/index.action