Scammers shift to South Island

The Motor Trade Association (MTA) is alerting car dealers across New Zealand to be on high alert with scammers moving their target area from Waikato to the South Island.

Darryn Cauflield, managing director of Auto66 in Hamilton, alerted the industry via Autofile on September 13 that car dealers have been ripped off by con artists using sophisticated methods, which sometimes involve trade-ins.

Now the MTA is on the case and is aware of at least half a dozen registered motor-vehicle dealers, which are also its members, who have been targeted – Auto66 being among them.

Tony Everett, pictured, sector manager – dealers, told Autofile Online that the association is aware of the scam, is liaising with its affected members and the authorities, and it appears stolen cars are being used.

“These scammers having been posing as sellers acting on behalf of sick relatives with rates that seem too good to be true,” says Everett.

“This has been exposing dealers’ willingness to do things on the fly. These criminals have also been pretending to be a wholesaler that doesn’t exist and they have changed their identities.

“They are now operating on the South Island after working in the Hamilton area. It’s a very sophisticated scam. Our advice to all dealers is to be on their guard if they smell anything weird with potential transactions. Delay any deal and do proper research on the vehicle, and contact the police if you have suspicions. This scam is ongoing and continues to be applied.”

Caulfield told Autofile Online he’s one of several traders to have fallen victim to the con artists. His business Auto66 has lost money as a result of the scam and he has contacted police about it. 

He says the criminals use a New Zealand cellphone number and he believes they registered a business in June or July on the companies register. He suspects it may be an “inside job” because they know a lot about the automotive industry and how it operates.

“They’re going about the scam the right way to drag money out of dealers,” says Caulfield. “They’re targeting the right kind of traders with the right type of vehicles. I think the con is being run by someone who has worked in the industry because it’s just too professional. They have a good understanding of how dealers purchase stock from private sellers.”

Caulfield adds the scammers pretend to buy a vehicle from a private seller on Trade Me and then send the seller a purchase agreement to buy it. Part of the process is getting the seller’s personal information, such as driver’s-licence and bank-account details, personal phone numbers and so on.

All of this happens before the criminals phone a dealer masquerading as a private seller wanting to on-sell to the registered motor-vehicle trader at a fair price. When the legitimate dealer asks the scammer, who pretends to be the actual owner, for details, everything about the owner and vehicle stacks up. 

Caulfield says dealers believe they are doing business with a legitimate seller and pay the agreed price into the scammers’ New Zealand bank account, only to find that when they go to pick up the vehicle that they’ve been ripped off. “The money’s gone and the dealer doesn’t have a car.”

The criminals also convince the legitimate owner they will purchase the vehicle, but need a few weeks before they can pay for it. They then ask the seller to remove his or her Trade Me listing. 

“Dealers pay their money into a Kiwi account, but the bank has informed us the money gets transferred overseas pretty rapidly,” says Caulfield. “They are using more than one account.

“I know of at least four traders who’ve been caught by them, including us, but this could be huge and hurting a lot of dealers. My thoughts are that more dealers will get burnt.

“They look for specialised vehicles for sale on Trade Me, pretend to buy them and get the seller to take the listing down. They then get the seller to sign a purchase agreement before saying they will collect the car in a few weeks. Then they pretend to be the seller and offer the vehicle to dealers. The scam is sophisticated and clever. We fell for it because the sale stacked up – it’s how dealers buy vehicles