Classifieds Websites and Used Car Purchases in Canada: Would Government Regulation Better Protect Consumers?

Author

Nicholas Maronese

Organization

Automobile Consumer Coalition (ACC)

Published

2013

Summary

The used-car-for-sale classifieds listings that used to appear in the back of newspapers or other magazines have moved almost entirely online, to classifieds websites like eBay-owned Kijiji.ca or AutoTrader. Of the roughly three million used cars Canadians buy and sell annually, as many as 600,000 trade hands via these websites, and the numbers are likely rising.

The popularity and ease-of-use of these classifieds websites have also made them attractive to scammers. Fraudsters often try to rob people of their money by either: collecting a legitimate buyer’s cash via an online money transfer and then failing to deliver the car; or by overpaying a legitimate seller for a car, and asking them to return the excess funds—before the seller realizes the scammer’s money transfer didn’t come through. Canadians also have to be mindful of “curbsiders”— full-time fraud artists with multiple vehicles who pose as private sellers online to circumvent provincial regulations or unload cars with concealed damage. Between nine and 29 percent of all Ontario online classifieds listings are from curbsiders, according to estimates from experts.

In April 2012, the Automobile Consumer Coalition (Car Help Canada) began looking into the state of online used car sales fraud and fraud prevention and what could be done about it. As part of their research, the Automobile Consumer Coalition commissioned Angus Reid Public Opinion to conduct a survey of Canadian used car shoppers to gauge how prevalent online car sales fraud and curbsiding were. Results showed roughly 20 percent of online used car buyers or sellers encounter at least one instance of fraud while looking for, or looking to sell, a vehicle.

Based on the findings of their report, the Automobile Consumer Coalition is recommending regulators and websites pursue these new curbsider detection technologies; that the provinces reevaluate
the ways they penalize curbsiders; and that the websites more often work together, and with regulators, to detect and track fraudsters and curbsiders.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.


Contact information

Address
Automobile Consumer Coalition
(ACC)
208-1110A Wilson Ave
North York, ON
M3M 1G7
Telephone
(416) 651-0555
Fax
(416) 651-5465

Source: Consumer Policy Research Database

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