Page last updated at 15:38 GMT, Thursday, 28 May 2009 16:38 UK

New vehicle scam costs 3m a year

Man fills up with petrol
The scam uses high pressure selling and cold calling

People selling cars in the UK are losing £3m a year from a scam that promises to match them with a buyer.

Consumers selling vehicles pay between £80 and £99 to the fraudsters who falsely claim that the buyer exists, the Office of Fair Trading said.

Advice service Consumer Direct received 1,600 complaints about the practice last year, but it estimates only one in 20 victims complains.

Most received cold calls after advertising their vehicle for sale.

'Hidden issue'

Trading standards officers believe the numbers affected are much higher, as not everyone complained and many wrote off the loss to experience.

HOW THE SCAM WORKS
Seller places an advert for vehicle
A cold call is made by the matching agency claiming a buyer is lined up
Seller pays between £80 and £99 for the match
No match is made and the seller loses the money

All these estimated losses would suggest that £3m a year was lost to the fraud, the OFT said.

"High-pressure selling alongside cold calling makes this a very successful scam, often leaving the consumer with very little chance of obtaining redress," said Peter Stratton, motor trade expert at the Trading Standards Institute.

Most cold-calls came after sellers put adverts for their vehicles in newspapers, magazines or online. People from across the UK and in the Irish Republic have been targeted, with a concentration of matching operations operating from London and Hertfordshire.

The OFT has agreed with various publications and websites to carry prominent warnings about the issue.

Website AutoTrader.co.uk said it offered a free service to sellers which blocked all known canvassing phone numbers from getting through, without stopping genuine phone calls from interested buyers.

Legal action

Two men were jailed for their part in the scam last September in Hertfordshire, with the judge in the case telling them they had been "lying to the public purely for profit".

In a separate case, a matching company called Vehicle Seller (UK) Limited, operating from South Woodford in London, was wound up in the High Court.

The company maintained that it would start making calls to buyers as soon as the customer was registered, that it spoke to thousands of prospective buyers every week and that the buyers' department would be "working for you round the clock, aiming to sell your vehicle in no time at all, getting you the best price possible".

But the High Court found that the company did not actively seek out buyers and did not even have a buyers' department at all.

Over its 18-month trading period, the company received an estimated 2,700 complaints from customers and the court heard that it was arguable that it ever caused a single car to be sold.



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