Latest US based Scam Targeting Canadian Car Buyers

TORONTO, Oct. 23, 2013 /CNW/ - OMVIC, the regulator of motor vehicle sales in Ontario, is warning car buyers of yet another online scam targeting Canadians.

According to Carey Smith, OMVIC Director of Investigations, Double Eagle Motors advertises on online vehicle marketplaces such as AutoTrader.ca, offering high-end and exotic vehicles at prices that are often 'too good to be true'. "When the potential buyer calls the number in the ad, and the number will appear to be a Canadian phone number, they are told the car is now in the US and are directed to the 'dealer's' website", explains Smith. Double Eagle Motor's website claims the dealership is based in Phoenix AZ, however the business does not actually exist. According to Smith, "The Arizona authorities have confirmed Double Eagle Motors is not licensed or registered. Consumers who send them money should not expect to receive a vehicle".

Terry O'Keefe, OMVIC Manager of Communications, says these frauds specifically target Canadians and are very sophisticated. "The Double Eagle Motors website is very professional and contains extensive inventory and convincing customer testimonials; they've even created recommendations on referral websites". Unfortunately, because of the international multi-jurisdictional nature of these scams, investigations and prosecutions are difficult and expensive. "The scammers know this - it's why they are targeting Canadians" explains O'Keefe.

An Ottawa man found himself square in the crosshairs of this scam last week while searching AutoTrader for a Ferrari. Daniel Nahon located a Ferrari F430 selling for approximately $25,000 less than what the car regularly sold for in Canada. "It was just the car I'd been searching for" explained Nahon. "The ad had a Montreal phone number but when I called they explained the car was now in Phoenix and directed me to the Double Eagle Motors website". Fortunately Nahon became suspicious after receiving the dealer's contract and contacted OMVIC before sending the $42,500 deposit the 'dealer' had requested. "I was fortunate, but this operation is very convincing and I don't want to see others victimized."

Double Eagle Motors may be the latest incarnation of a phony dealership scam that first appeared in December 2012; it uses websites, contracts and tactics eerily similar to those of Ambient Auto Center and Sprint Luxury Auto, both supposedly based in Oklahoma City, and Husen Original Autos, that claimed to be based in Phoenix; all were phony dealerships. OMVIC knows of five Canadians who lost over $200,000 to the Ambient scam alone.

Protect Yourself

OMVIC strongly cautions Ontarians considering buying vehicles remotely, whether privately or from a dealer in another state or province, and offers the following tips:

• Beware of a price that is considerably lower than the average market price. If a price seems too good to be true it should be seen as a warning, not an opportunity.
• Travel to see the vehicle - don't rely on pictures or a convincing website. If a buyer can't travel to see the vehicle, hire an appraiser or mechanic to inspect the vehicle. They can ensure the vehicle actually exists and the seller is who they claim to be.
• Check with state or provincial regulators/authorities to ensure dealers are licensed.
• Purchase a vehicle history report for the vehicle - don't simply rely on a report provided by the seller: they can be altered.
• Don't wire money or provide a credit card number without first doing all homework.
• Don't do it - consider that the savings are probably not worth the gamble, especially in light of the rapid proliferation of these scams.

O'Keefe wants Ontarians to know "they are only protected by OMVIC and Ontario's consumer protection laws, and only have access to the Motor Vehicle Dealers Compensation Fund, when they buy from an OMVIC-registered dealer. If consumers buy privately, or outside the province, and something goes wrong they are basically on their own. It's simply not worth the risk."

About OMVIC:

The Ontario Motor Vehicle Industry Council (OMVIC) administers and enforces the Motor Vehicle Dealers Act (MVDA) on behalf of the Ministry of Consumer Services. OMVIC maintains a fair and informed vehicle sales marketplace by regulating dealers and salespersons, regularly inspecting Ontario's 8,000 dealerships and 24,000 salespeople, maintaining a complaint line for consumers and conducting investigations and prosecutions. OMVIC is also responsible for administering the Motor Vehicle Dealers Compensation Fund on behalf of its Board of Trustees.

About Motor Vehicle Dealers Compensation Fund:

The Motor Vehicle Dealers Compensation Fund is fully funded by Ontario's registered motor vehicle dealers and provides compensation to consumers who have a valid claim against an Ontario-registered dealer. Qualifying consumers may be eligible to receive up to $45,000 for each valid claim to the Compensation Fund. Since its inception on July 1, 1986, the Compensation Fund has paid out over $5 million to consumers. In 2011, the Compensation Fund celebrated 25 years of providing advanced consumer protection to Ontarians.

SOURCE: Ontario Motor Vehicle Industry Council (OMVIC)

Terry O'Keefe 
Manager of Communications, Media Relations and Education 
416-226-4500x3525 
Email: [email protected] 
Web:  www.omvic.on.ca
www.buywithconfidence.ca

Sarah Choudhury
Communications Officer
416-226-4500x3172
Email: [email protected]
Web:  www.omvic.on.ca
www.buywithconfidence.ca