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Recent Insurance Scam Targets Used Car Dealers
November 7th, 2009
A check scam has recently hit many car salesmen in South Carolina, according to police. Car lots in Horry County have been victimized by scam artists pretending to be interested in buying new or used vehicles. In the scam, they present the dealer with a check from their car insurance company, claiming that a recent accident resulted in a sizable car insurance claim. After a bit of convincing negotiation, these scammers ask to buy a car on the lot. The check is in excess of the cost of the car, so the dealer writes the scam artist a check for the difference in order to make the sale. The scam artist or artists then drive away with the car and a check, and the car dealer is forced to take a tough loss.
The scam may spread to other areas of the United States, so car dealers are encouraged to make calls to the car insurance agency of any customers who present checks from car insurance claims. When running the scam, a common tactic of the fake customers is to go into dealerships on Saturdays, when managers are less likely to thoroughly check up on them before selling a car, so it's important for dealerships to stay wary at all times. The checks from the scam artists appear to be real car insurance checks in nearly every way. Many also carry the name “Safe Auto Insurance,” a non-existent company made up for the purpose of the scam. Car dealers that take the checks should cancel payment on any checks they've written for a difference as soon as they realize they've been scammed. They should also report the cars as stolen as quickly as possible to improve police chances of catching scammers.
Car insurance fraud is more common during tough economic times, as consumers look for unconventional and sometimes illegal ways to make extra money. Most car insurance scams don't involve dealers, which may be one reason why this scam has worked successfully so far. Other forms of car insurance fraud may include purposely destroying a vehicle and then filing a claim, or consciously overstating the value of a damaged car in order to reap the insurance benefits. Police and insurers prosecute any type of car insurance scam as a crime, and many carry prison sentences. The South Carolina insurance scam has ripped off several dealers, and seems to be spreading, but police in the state have issued a warrant for the arrest of one of the suspects. In the mean time, car insurance dealers and consumers are encouraged to contact police if they have any information pertaining to an active car insurance scam.
