Friday, November 8, 2013

How to Avoid Classified Ad Scams

With 37 years of experience, the Iwanna is an expert on all the most common scams used in classified ads.  Unlike some other websites, we have humans who review the ads for red flags and we catch quite a few before they ever make it into the Iwanna.  But scammers are working hard to come up with new ways to steal and cheat everyday.  So, we’ve created this guide to help you avoid getting scammed when buying or selling in the classifieds:

Deal locally and meet in person. Following this one rule will help you avoid nearly all scam attempts.  Never do business with anyone in another state or country, or anyone who makes a lot of excuses about why they can’t meet you in person. Scammers frequently lie about being missionaries, being in the military, or taking care of a sick relative to explain why they can’t meet you. Don’t believe their stories.  

Never invite the buyer to your home unless it’s absolutely necessary.  If you’re selling a large piece of furniture, for example, move the furniture out into your yard and don’t let the buyer inside your house. Make sure you’re not home alone if a buyer is coming over.

If you’re buying, never send someone money in advance of receiving your item.  Don’t send funds via Western Union, Moneygram or mail a check or money order.  If you don’t make a trade of item for money on the spot, it is likely a scam.  

If you’re selling, never ship your item without receiving the money.   One common scam involves a “buyer” who sends you a money order or cashier’s check, which is much higher than the agreed-upon price. The scammer asks you to deposit it and send them the price difference via Western Union. After you’ve wired the money, the bank discovers it’s a counterfeit check and you’re responsible for paying it. By then, your own money is long gone.

Insist on cash.  People sometimes write bad checks and it is also possible to fake a cashiers check or a money order.  Cash is the only sure way to know you’re receiving legitimate funds for your item.  If you’re dealing in large sums of money, suggest meeting at the bank to make the exchange.  You can make the money exchange inside the building, eliminating the worry of carrying around a lot of cash.

Use a counterfeit detection pen.  If you’re dealing in a large sum of cash, you definitely want to make sure the bills are real.  A counterfeit detection pen will allow you to find out if someone is trying to pay you in phony bills. You can find counterfeit detection pens at most office supply stores, or online, for less than $5.

Avoid any deal that involves a shipping or escrow service.  If you’re asked to send money to someone so your item can be shipped from another location.  This is likely a scam.  Many sellers or buyers will ask to use an online escrow service to “guarantee” the transaction.  If you’re dealing in person and exchanging cash for goods on the spot, there is no need for a guarantee.  Many scammers use this as a way to gain access to your personal financial information.

Have a good idea of what the going price is for the item.  If you’re buying a car from the classifieds, do your homework on sites like Kelley Blue Book to find out what the going rate is for the same car.  Check other ads for the same type of car and compare their prices and features.  Ask your friends or family what price they think is reasonable for the item you’re planning to buy.

Do not sell a vehicle without a notary. Be sure to get the title notarized when you’re selling your vehicle.  This is another great reason to make the exchange at a bank.  Most banks will do this for their customers for little or no charge.  It is possible to sign over the title without having it notarized, but if the buyer doesn’t take care of the paperwork later, the vehicle will still technically be in your name.  This means you would be responsible for any accidents that happen involving the vehicle and you will still owe property tax on the vehicle in the future even though you don’t have the vehicle anymore.

Limit the amount of personal information you give out.  When posting ads online, do not include your home address, phone number or full name in the description part of the listing.  When posting in the paper, give as little detail as possible, for example “call John at 828-555-1234”.  If you sell a lot of things in the classifieds, you may want to setup a dedicated email address or use a prepay phone to avoid giving out your personal contact info.  If you receive a reply from an interested buyer, never give out your bank account number, social security number, driver’s license number, date of birth or any other information that seems out of the ordinary. 

Don’t fall for job scams.  If you’re looking for a job online, be careful of anyone who is willing to give you a job without an interview or a face-to-face meeting.  Research the company and make sure they have an actual office before you provide any personal information. Never accept a job for secret shopping, international shipping management, foreign financial transfers, survey-taking, anything that requires you to pay money, or anything that simply involves “working from home” without going into greater detail. These types of “jobs” are almost always a scam.

If you’re applying for a job or to rent a new home, don’t submit information for any credit or background checks until you’ve met in person.  Many jobs and landlords require your personal information to perform legitimate credit or background checks.  However, scammers use this trick to gain access to your private information.  Always make sure you meet the landlord or go to the job office in person to verify it is a legitimate business before providing your personal information.

Don’t click on strange email links.  If you receive an inquiry from a buyer that includes a link to another web page, do not click the link.  This is the most common way computer viruses are spread.

Follow your instincts.  If something doesn’t seem right about the transaction, it probably is not right.  If you have a suspicion something is a scam, you can always use Google or Scambook to search with someone’s name, email address, phone number, or business name (whatever they have provided).  If the person has scammed or tried to scam someone before, it is probably listed online.  

Buying and selling through the classifieds is a great way to make money on things you don't use and save money on things you want to buy.  By following these few tips and trusting your gut, you can stay safe from scammers.