sail-world.com
 
 
News Home Video Gallery Photo Gallery

 

Sail-World.com : Boat buying: Don't get lured into a deal that's too good!

Boat buying: Don't get lured into a deal that's too good!

'Which one is real'    .    Click Here to view large photo

With see-sawing boat prices round the world, many yacht buyers are tempted to pick up a bargain in a distant port. This article by Caroline Ajootian, which recently won a Boating Writers International (BWI) award, originally appeared in August/September 2011 BoatU.S. Magazine, the largest-circulation boating magazine in the United States – www.BoatUS.com/Magazine. With vital information and excellent reporting, it is here reprinted with their kind permission.

Please note, legal references in this article apply to the USA, but the general message is still the same if that is not where you are located.

Watch out for crocodiles - photo by Pat Ford -  .. .  
These two boat-buying deals seemed fine at first, but then something did seem a little fishy. Here are two cautionary tales, so the same never happens to you.

Two marine surveyors recently reported to BoatUS that clients of theirs had been duped by the same online boat-buying scam. In both cases, the would-be buyers paid $22,000 to a bogus escrow company for boats that didn't exist. In retrospect, red flags and the distinct odor of rotten fish marked every aspect of both deals described by the surveyors. But, said one of the scam victims, a New York man who hoped to share the joys of fishing and boating with his young child, 'I wanted to believe [the deal] was a great way to buy a boat. I ignored the warning signs.'

In the first case, the New York buyer found a 2005 Hydra-Sports 2400 for sale in Pacifica, California, on one of the major online boat-listing sites. He looked at pictures posted on the photo-sharing site Photobucket and had several phone conversations and exchanged e-mail with a Seattle man who purported to be the seller. 'The seller sounded like he was at least 55 years old and had an Eastern European accent. He told me he owned a diner in Pacifica and had just bought another one in Seattle,' the buyer said. 'The asking price was $22,000, much less than what the same model was selling for elsewhere.'

The BoatUS Value Check service places fair market value for the 2005 Hydra-Sports 2400 at $35,000 to $38,000. According to the buyer, 'When I asked about the low price, the seller said the boat had been given to him as a wedding present, so how much he sold it for wasn't very important.'

The buyer hired a marine surveyor and a mechanic to inspect the boat and its Yamaha engine. The seller suggested two locations for the sea trial, both of which turned out to be reservoirs that didn't allow powerboats.

'Fishy! Bells and whistles went off!' the Alameda surveyor told BoatUS, because the seller of the boat claimed to be very familiar with the area. 'I told my client to be especially careful about turning over money to the seller. However, the buyer informed me that the money would be held by an escrow company pending the sale,' the surveyor said. 'He thought he was being careful.'

The marine mechanic hired to inspect the Yamaha engine asked the seller for model information, so that he could check service records. Immediately, another red flag went up because the seller 'hemmed and hawed,' according to the New York buyer, and eventually said he didn't have his ownership papers handy. At this point, both the surveyor and the mechanic cautioned the buyer that details of the sale just didn't add up. But the New York buyer admits he ignored their warnings. 'There were things I should've seen, but they just didn't register. I filled in the pieces myself to make things work.'

The buyer said the seller steered him to place payment for the boat with an online escrow company called AOL Money & Finance. 'Everything was about the escrow,' the buyer said. 'The seller told me AOL Money & Finance was like PayPal, so I assumed it was legit and wire-transferred the money. I trusted the company because it mentioned AOL.' AOL offers information and news about financial matters on its site, but does not provide an escrow service or any other money-handling service.

On the day the boat and engine inspections were scheduled to take place, the surveyor and mechanic arrived at the agreed-upon place in Eddo's Harbor in the California Delta. 'We hung out for an hour,' said the surveyor. 'No boat.' By this time, the buyer had transferred the entire $22,000 to AOL Money & Finance. He said it was not until later that he realized the receiving account wasn't with AOL Money & Finance, but a bank in Georgia. He says the bank account was in the name of a company called US Export LLC and, by the next day, the account was empty. The buyer's bank told him they couldn't recover the funds. The Georgia Secretary of State's Corporations Division has no active records for the company.

A One-Two Punch:
On the heels of the New York report came a second one involving a boat purported to be located in Tennessee. Recalls the surveyor, 'I was contacted by a fellow in Ontario to do a pre-purchase survey on a 2006 Pro-Line 24 Super Sport that was supposed to be at the seller's home here in the Chattanooga area. The seller said he was in Seattle and, after some discussion, said he'd fly back to show me the boat. The evening before the survey, neither my client nor I can contact 'Mr. seller.' I found a local phone number for the address where the boat was supposed to be and the man who answered said there was no boat for sale there. My client and I agreed there was something fishy.' The surveyor said his client had already wire-transferred $22,000 to an escrow company recommended by the seller.

'The money transaction was set up via e-mail from a source called AOL Money & Finance,' the buyer said. 'The process was for me to wire-transfer funds that would be held in a secure investment account. This transaction took place through BB&T Bank in Lithia Springs, Georgia. The system that the 'seller' has in place and the correspondence that we were sent looked legitimate, and I still can't believe I got caught in this,' the Ontario buyer said.

Both buyer-victims said that, once their money was wire-transferred, they were unable to contact the seller again. When BoatUS began to look into these complaints, we found a listing for AOL Money & Finance on the Better Business Bureau's Web site. The listing includes a Miami Beach postal address, which appears to be in a residential neighborhood of two-story attached houses, and a Web site address that the New York buyer said differed from the one he used. As our research continued, we found that the AOL Money & Finance URL changed at least twice over the course of several weeks. The company isn't listed in Florida business records, nor does it appear to be licensed, as required by state law.

The various AOL Money & Finance Web sites contained no physical address, nor did they provide a telephone number for direct contact. They did, however, provide an e-mail link for communicating with the company.

Safe Steps:
Placing deposit money or the full purchase amount in escrow is clearly the smart thing to do when making a major purchase. But, the experiences of the buyers in New York and Ontario demonstrate that all escrow accounts are not created equal. Doing business with a known company is step one. Your bank may be able to help with an escrow account. The BoatUS Settlement Service is another option specifically geared to transactions involving recreational vessels. The fee for the full settlement process is $600.

The BoatUS Settlement Service verifies the seller's ownership information, holds the deposit check, and helps arrange for the final payment to the seller — all of which would've protected both buyers in the AOL Money & Finance scam. The scammer-seller would probably not have been able to produce documentation showing he owned either boat.

Hiring a marine surveyor to inspect a used boat, especially one that's being sold long-distance, is essential. Never buy a boat sight-unseen based on the seller's description, and never rely upon a surveyor recommended by the seller. The BoatUS Surveyor Referral Service is a good source for independent experts.

Due to the poor economy, boat buyers have a broad selection to choose from. Buying a long-distance bargain can come at a price — not the least of which is the cost of transporting the vessel across country.

Law Enforcement:
The Internet Crime Complaint Center (IC3) is a partnership between the FBI and the National White Collar Crime Center, a nonprofit membership organization that focuses on economic and high-tech crime. It serves as a means to receive Internet-related criminal complaints. Escrow services fraud is listed by the IC3 as one of the most common web crimes. The IC3 provides the following tips:

Always type in the Web site address yourself rather than clicking on a link provided. For example, clicking on the link for AOL Money & Finance brought the searcher to an address that was slightly different than the one in the link.
A legitimate Web site will be unique and will not duplicate the work of other companies.
Be cautious when a site requests payment to an 'agent' instead of a corporate entity. Both victims in the AOL Money & Finance scam saw the transfer-to accounts were different.

Be leery of escrow sites that only accept wire transfers or e-currency. The AOL Money & Finance site said it accepted credit-card payments only for transactions of $5,000 or less and that transactions above this amount had to be made by wire transfer. Credit card companies have mechanisms for placing stop-payments on disputed amounts and there are limits on cardholders' liability for fraudulent charges. In contrast, wire transfers typically move money from one bank account to another and can't be reversed without authorization by the holder of the account that receives the funds.
Be watchful of spelling errors, grammar problems, or inconsistent information.
Beware of sites that have escrow fees that are unreasonably low. Consumers can expect to pay from $500 to $1,000 in escrow fees. The amount may depend on the value of the transaction.

More Information:
BoatUS Settlement Service, www.BoatUS.com/boatloans/service/default.asp
Internet Crime Complaint Center, www.ic3.gov
BoatUS Surveyor Referral Service, www.BoatUS.com/insurance/survey.asp
BoatUS Consumer Protection Bureau, 703-461-2856 or consumerprotection@boatUS.com

Consumers who believe they are victims of the AOL Money & Finance escrow scam, or other similar internet scams, should contact the BoatUS Consumer Protection Bureau, as well as report their experiences to the IC3.




by Caroline Ajootian

  

Click on the FB Like link to post this story to your FB wall

http://www.sail-world.com/index.cfm?nid=94272

2:00 AM Sat 25 Feb 2012 GMT






Click here for printer friendly version
Click here to send us feedback or comments about this story.


News - USA and the World





























America's Cup Book Review: Winging It - Oracle Team USA's comeback *Feature by Richard Gladwell Sail-World.com/nz,




Rolex China Sea Race 2014 - nip and tuck for IRC honours by RHKYC and Guy Nowell, Sail-World Asia, Hong Kong


























HUD Vision: An interview with Afterguard Marine’s Alex Moret *Feature by David Schmidt, Sail-World USA Editor, Seattle








ISAF Match Race Rankings for 16 April 2014
ISAF Sailing World Cup Hyeres – World’s best to race on French Riviera
Rolex China Sea Race – Fleet off to a clean start
America's Cup: Expected de Ridder penalty should be reduced *Feature
World Youth Sailing Week – Second edition officially presented + Video
Rolex China Sea Race - Sailing classic returns
Les Voiles de St Barth – Fired up for battle
CNN Mainsail Down Under for the 75th JJ Giltinan Trophy - 18ft skiffs
Volvo Ocean Race: North Sails on outfitting the Volvo 65
Image gallery: James Cook High's Royal encounter on Steinlager 2 *Feature
Volvo Ocean Race - Maersk Line named shipping partner
Congressional Cup - Victory for Taylor Canfield and crew
SSV Oliver Hazard Perry joins America's Tall Ship fleet + Video
2014 Halifax – Saint-Pierre Ocean Race
Oyster Regatta Antigua - Glorious conditions prevail on final day
WWA Pro Card Qualifier - Pro Cards earned at Freedom Wake Park
Christmas Caribbean Rally - Top class sailors to compete
Earth Day boater tips
Anna Tunnicliffe - from CrossFit to Extreme 40's
Charleston Race Week - Photos by Chris Howell
Image Gallery: Stratis SL33 flies on the Waitemata   
Audi Melges 20- Sperry Topsider Charleston Race Week - Light final day   
Clipper Round the World Yacht Race - PSP Logistics prepares for USA   
ISAF Sailing World Cup Hyères - Crème of the crop to compete   
Congressional Cup: Luna Rossa makes podium in first event   
Int 14 World Championships 2015 launch new event website   
International Optimist Regatta Clinic and Team Race - Register now!   
Congressional Cup: World top rankers finish that way in Long Beach   
Sperry Top-Sider Charleston Race Week Day 3 finale   
America's Cup: Gino Morrelli outlines the new AC62 design   
Doyle Sails New Zealand signs Andrew Brown as One Design Manager   
America's Cup: Dean Barker's Blog - A sail with the Duke and Duchess *Feature   
29er World Youth Sailing Week Easter regatta - Day 1 and 2 overall   
C Thomas Clagett Jr Memorial Clinic/Regatta - Entries start to roll in   
50th Congressional Cup: See the delayed coverage and media conferences   
Clipper Race 10 Day 27: Closing stages - Qingdao to San Francisco   
Canfield, Williams, Bruni, Swinton in Congressional Cup final four   
Sperry Top-Sider Charleston Race Week - Day 2   
Audi Melges 20 Charleston Race Week - Perfect conditions in Charleston   
Oyster Regatta Antigua - Full on ocean conditions for day 3   


For this week's complete news stories select    Last 7 Days
   Search All News
For last month's complete news stories select    Last 30 Days
   Archive News







Sail-World.com  


















Switch Default Region to:

Social Media

Asia

Australia

Canada

Europe

New Zealand

United Kingdom


http://www.sail-world.com/event_images/image/Twitter_logo_small.png http://www.sail-world.com/event_images/image/FaceBook-icon.png  http://www.sail-world.com/event_images/image/RSS-Icon.png

United States

Cruising Northern

Cruising Southern

MarineBusiness World

PowerBoat World

FishingBoating World

 

Contact

Commercial

News

Search

Contact Us

Advertisers Information

Submit news/events

Search Stories/Text

Feedback

Advertisers Directory

Newsletter Archive

Photo Gallery

 

Banner Advertising Details

Newsletter Subscribe

Video Gallery

Policies

 

 

 

Privacy Policy

 

 


Cookie Policy

 

 



This site and its contents are © Copyright TetraMedia and/or the original author, photographer etc. All Rights Reserved.  Photographs are copyright by law.  If you wish to use or buy a photograph contact the photographer directly.
X6XL NEW US