VSA Industry Dealer Alert
December 14, 2023

Fraudulent Transactions

The VSA wishes to alert licensees of potential fraudulent activity in relation to vehicle transactions. This dealer alert is being issued due to a recent increase in fraudulent purchase activity that has affected numerous dealerships across BC. 

The Reported Fraudulent Activity: 

  • An individual posing as a legitimate purchaser engages in negotiations for a vehicle purchase with a dealership. 
  • Through negotiations with the dealer, the purchaser obtains the dealer’s bank account information under the guise of paying for the vehicle by way of a wire transfer. 
  • Using the dealership’s account details, the individual creates a counterfeit cheque. 
  • The purchaser proceeds to negotiate the purchase of another vehicle at a second licensed dealership. 
  • The purchaser uses the counterfeit cheque to pay for the vehicle by way of a wire transfer to the second dealership. 
  • The dealership releases the vehicle to the purchaser after confirming receipt of the wire transfer payment. 
  • The bank notifies the dealership that the deposited check for the wire transfer was fraudulent. 
  • The vehicle has already been driven off the lot and is not returned. 

While law enforcement in the affected jurisdictions has been notified of this fraudulent activity, it is essential for dealers to be aware and take tangible measures to guard against fraud. 

Fraud Prevention Measures: 

The Canadian Anti-Fraud Centre recommends several safeguarding measures to businesses to protect against fraud: 

  • Know who you’re dealing with 
  • Don’t give out information on unsolicited calls 
  • Limit your employees’ authority 
  • Watch for Anomalies as highlighted by the Canadian Anti-Fraud Centre website 

Ensure that a person’s identification is vetted and inspect documentation thoroughly. If there is any doubt during a deal or if information may be missing, defer releasing a vehicle until all information is at hand. Third party verification services are available from Equifax and TransUnion.  

Should you believe there may be a risk of an unauthorized transaction: 

  • Change any passwords immediately 
  • Notify your bank, and 
  • Review your statement