As Wisconsinites prepare for winter’s icy grip to firmly take hold, it might seem odd to think about buying a boat. However, several boat sales on Craigslist made news recently because they turned out to be nothing more than a sophisticated new scam according to the Wisconsin Department of Agriculture.
Thought for the Day: Make sure there is actually a boat before you plunk down your hard-earned money.
The Ag department’s report states that customers have lost thousands of dollars after putting their money into escrow accounts at the sellers’ request. In one case, the seller even went so far as listing a phony law firm as holding the “escrow” account. Once the buyers deposited their money, it was transferred out of state and then out of the country.
One unfortunate buyer from Illinois lost $20,000 trying to buy a boat in Wisconsin. Another buyer in Tennessee thought he had found the perfect boat. The owner supposedly lived in Alaska and the boat was allegedly stored in Brookfield. Saying that she had once been scammed herself, she had insisted that the buyer deposit the full amount into an account managed by a law firm. Fortunately, the buyer became suspicious and discovered that there was no boat and the law firm doesn’t exist.
These types of Craigslist scams are getting much more sophisticated and part of the reason they work is that the customer doesn’t fully think things through before parting with their money. They think to themselves, ‘Well, it’s a trust account being managed by a law firm and that’s all that’s required to hold the money’ and they go ahead and pull the trigger on the deal. The next thing you know, the money’s gone and the reality that the deal was a scam slowly and painfully starts to sink in.
Again, this is one of those circumstances where you really need to be careful about who you are dealing with. Be careful about putting money on the front end to any trust account unless it happens to be a firm or some kind of agency that you are very familiar with and can verify that it actually exists and that they’ll do exactly what they say they will do.
Now, do I think more and more people will back away from using Craigslist because these kinds of scams are taking place? Not necessarily. I personally use Craigslist on a fairly regular basis both to sell items and to purchase them. I think it’s a phenomenal tool, especially to purchase used goods at the local level.
However, at what dollar amount level will customers be comfortable transacting business on Craigslist? Is the limit $1,000? Or maybe $5,000 – $10,000? Personally, I would be more leery spending a high dollar amount without having more of a guarantee. For example, let’s look at buying a used car. Back in the day, you would just look at a newspaper ad, show up at the seller’s front door and see a physical car. Craigslist changes everything. You simply view digital images of the car on your computer and, if you’re interested, you make the transaction.
Make sure the item actually exists but keep in mind that protecting yourself only goes so far. Ultimately, it always comes down to Buyer Beware. To the best of your ability, have a reliable source to verify that the item actually exists and is available as advertised.
In cases like the boat scam, crossing state lines to make a purchase is a relevant issue. And, of course, there are the costs. How much are you willing to risk if the deal does go south? Fifty dollars is one thing. Five thousand is a much bigger chunk of change and only you can decide if the potential returns are worth the risk.
Here are some additional Do’s and Don’ts when buying or selling on Craigslist:
- Be smart about how you are meeting people you don’t know. Meet in a public place like a gas station or an office where there are other people around.
- You don’t want people showing up at your house.
- Make the transaction practical. If you don’t want to bring the washer or dryer to the gas station, maybe you should think twice about selling that item on Craigslist. Remember, Craigslist is global. It’s not smart to invite just anybody to your home.
- Cash, cash, cash! If you are the seller, do not accept checks, even cashier’s checks which can be falsified with bogus bank routing numbers.
- Before buying, especially on big ticket items, make sure you check the item out. Make sure you are getting what they say you are getting. Vehicles, boats , etc.
Another scam we’ve seen goes like this. The buyer says, “I’ll send you a check and I will over-pay for this because of all the time and expense of you having to deal with. Ship it to me, sight unseen.” That’s too good to be true. The check will most likely be falsified. You’ve just shipped your item for a worthless check.
It pays to do your homework to the greatest extent possible. Otherwise, you may very well be left holding the bag.