Ouch! Gauteng woman suffers R64,000 loss to 'pre-auction sale' scam

In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use:

How not to buy a car

“Lerato” of Soweto saw Instagram adverts for cars about to be auctioned by a company calling itself Motus Autohuis, and earlier this week, after contacting the company, she was e-mailed a range of repossessed cars being prepared for auction. Or so she was told.

She fancied a 2015 BMW 135i Sport, and was told they would pull it out of the auction if she paid a deposit on the R55,000 selling price.

The price alone should have been a great big red flag, but Lerato did as she was told.

Her first “deposit” payment was R20,000, followed by one of R35,000, at which point she believed she’d paid in full for the Beemer.

Then she was told that VAT hadn’t been included in the advertised price, and asked to pay another R9,000. She did, bringing her total loss to R64,000, the money having come out of her savings and credit card accounts.

The car never materialised and both her cellphone numbers were promptly blocked by the fraudsters.

The “pre-auction sale” scam is rife, with the fraudsters often using the names of well-known brands to inspire confidence in buyers such as Lerato.

I alerted Motus, SA’s leading automotive group, to this one. Responding, the company’s corporate affairs executive, Berenice Francis, said Lerato’s experience was all too common “despite the many warnings retailers and the media provide”.

“Unfortunately, like other retailers, we find it very hard to prevent or limit this type of criminal activity,” she said.

“When made aware of such websites, we contact the registered domain owner or highlight the risk on the necessary platform.

“In this case, the link is referenced to a social media platform and these are difficult to close down, other than messaging on the platform, which is managed by the administrator of the page and can be deleted.

“Soon after we identify a potential scam, the site is often closed and they have already moved on to the next scam.

“The transition of consumers to online purchasing has unfortunately created new opportunities for criminals to take advantage of consumers.”

Motus’ tips for responding to car adverts:

• Always go to the main website page and check the detailed url addresses;
• Browse the actual website and look at all the offers on sale to assess the legitimacy of not only the offer, but the business;
• Legal operators conform to responsible consumer practices and allow for reasonable time periods between making a purchase decision and placing a deposit or making a payment. So when buying a high-ticket item like a car, be very suspicious if the seller pressures you into making a payment within a limited time;
• Anyone buying a vehicle will need to be taken through a FICA onboarding and verification process as bona fide car dealers are not allowed to just accept cash into their bank account without understanding the source of the funds and the client who provided them.

Battling to pay your car instalments? Jump before you are pushed

Experian’s Consumer Default Index for the first quarter of this year shows that increasing numbers of people are battling to keep up with their car repayments.

“Reports by TransUnion and National Debt Advisors have echoed these findings and despite the lockdown relief measures put in place by banks to assist cash-strapped borrowers, car repossessions are rising,” says Marc Friedman, CEO of online car selling platform Weelee.co.za.

“Covid-19’s third wave is putting South Africans under even more pressure. To avoid a repossession, cash-strapped vehicle owners need to react promptly and be wise in weighing up the various options available to them.”

In other words, selling your car yourself will be a lot less financially catastrophic than having the bank repossess your car and then sell it for a typically very low sum, often leaving you with no wheels, plus an outstanding balance to pay to the bank.

First, research the going rate for your car. Don’t simply settle for the first offer.

Many criminals pose as buyers, ready to target unsuspecting sellers, so only use screened, trusted dealers or properly secured platforms.

Never say no to a 'till slip'

At the checkout of my local Spar this week, the cashier asked me if I wanted a receipt. “Yes,” I said. “But the fact that you’re asking that question tells me that most of your customers answer with a ‘no’.”

She nodded. “I think they are mad.” And she’s right.

No retailer is obliged to take responsibility for a product if you can’t prove where or when you bought it.

If you are blasé about a supermarket till slip, chances are you won’t pay enough attention to receipts for big-ticket items either, and that can cost you dearly.

If you aren’t super organised, that’s fine. All you need is a box or drawer into which you routinely deposit your receipts. If it’s an expensive item, photograph the receipt as backup as it’s sure to fade before the warranty expires.

CONTACT WENDY: E-mail: consumer@knowler.co.za; Twitter: @wendyknowler; Facebook: wendyknowlerconsumer