In my role as a private investigator specialising in fraud and financial recoveries, I have noticed two alarming developments – a new scam targeted at recent immigrants, and some dodgy deals aimed at vulnerable people in our community. These are the exiting working / studying tourist scam, and the Facebook car sales and self-financing scenario.
In the last three months we have seen the same scenario play out 10 times. An overseas student or work visa holder finances a vehicle for around $10,000. They make all the payments as required for three-to-six months leading up to the date that they are scheduled to leave NZ for home.
They then sell the vehicle for $5000 to a recently made acquaintance who has just arrived in NZ, without clearing the $8000 or so remaining balance on their secured loan.
The unsuspecting purchaser then registers the vehicle in their own name and at their address, which is flagged on the system of the finance company and triggers a “security at risk” repossession order to be generated.
Armed with all the correct paperwork and licenses, the repo agents go and uplift the vehicle. Not only is the purchaser out $5000 and their car, they also do not have a chance of legal redress from the seller who is now thousands of miles away in another jurisdiction.
It’s never a bad investment to do a Carjam or similar ownership and finance check on any vehicle purchased privately.
The other new scheme that seems to be becoming increasingly popular is what we call “Facebook financing”.
More and more Posts are appearing on social media pages along the lines of “car wanted, must have warrant or at least not de-Reg, needed for young family, can pay 100 per week, condition not important”.
Sometimes the posts will be on behalf of friends or loved ones.
But although the intention seems to be charitable and innocent, there are real risks for those on both sides of the transaction.
If the seller has no formal agreement, they have no rights of vehicle recovery should payment not be made, no right to add late payment costs, no control over what modifications can be made to the vehicle while there is still money owing, and no proof that the transaction even occurred. (There have also been cases of theft accusations against “purchasers” that had paid deposits before the “seller” changed their mind).
When we are asked to pursue debts of this nature it is a nightmare and the value of the time spent working it all out and gathering proof often eclipses the transaction amount.
You have to think, with all of the hundreds of vehicle financing options that are available, the prospective purchaser is either so credit unworthy that no one will finance them, or they potentially have fraudulent
There is a reason why finance companies have ID Checks, Equifax or Centrix credit checks, and hold PPSR securities over vehicles.
Licensed car dealers and finance companies are regulated by law and these regulations are designed to protect consumers.
One simple question to ask is this: if companies that understand risk and debtor behaviour refuse to finance these people into vehicles, isn’t it crazy to risk your own money doing it?
Also for purchasers the chances of being sold an unsafe, badly repaired or even written off vehicle is much higher when these “bargain” deals are sought out. There are some very good cars being sold by very honest people on social media, but how is the average person meant to tell them from sellers who are not so honest?
So remember, sometimes a good deal can be very one-sided.
Nick Kerr is also a licensed private investigator with his own firm, International Private Investigations.