Don’t Get Scammed When Buying Construction Equipment
From robo-calls to spam emails, there are a lot of dishonest people out there looking to make a quick buck off you. Many of these scams are nothing more than a minor annoyance that are obvious and can be quickly deleted or ignored. There are other scams, though, related specifically to your business that you need to be on the lookout for.
Unfortunately, many scammers see the used construction and mining market as a lucrative way to steal a lot of money quickly. And, the victims of used equipment scams are usually left with nothing to show for it and often have very little legal recourse since many scammers are located beyond any government’s reach.
While the Internet has connected the world, and made it much easier for businesses to research and purchase equipment, it has also made it easier for scammers to take advantage of people and then quickly disappear. That’s not to say that these types of scams cannot happen in person, but your odds are significantly higher when buying or selling online.
To make sure you don’t become a victim, you need to take your time when buying or selling a used piece of equipment if you’ve never worked with that individual before. For example, if a seller refuses to let you see the equipment, attempts to route all transactions through a third-party payer, asks for your bank account information or does not communication through normal channels, there’s a good chance a scammer is trying to take advantage of you.
Don’t become a victim!
Here are some precautions you can take to protect yourself:
- Stick to reputable online listing sites: A quality and trustworthy used equipment listing site, like IEDAUsed.com, is the best way to make sure you do not become a victim of fraud. These sites will either charge sellers for listing and/or require a membership to post listings. Also, most reputable listing sites do not allow any transactions to happen online, instead they simply make it easy for buyers to track down the equipment they desire and then put them in contact with the seller.
- Avoid sites known for fraudulent activity: Sites like craiglist.com and ebay.com have a lot of honest people buying and selling equipment, but these platforms are also the most targeted sites by scammers. Ebay has precautions in place to protect buyers and sellers; however, if you are a victim of a scam and report it, you need to wait for a lengthy investigation process to hopefully rule in your favor. Craigslist, on the other hand, has no responsibility for anything bought or sold on the site. And, overpayment schemes occur often.
- What’s an overpayment scheme? The buying company will send the seller a certain amount of money over the agreed selling price, requesting that the seller then send the overage to a shipping agent. Victims of this scam have paid the ‘shipping agent’ before the check from the buyer clears. They then find the buyer’s check does not clear, and they are out whatever amount they have sent to the phony shipping agent.
- Buy from established dealers: Most independent dealers engage in honest sales practices because they have too much invested in their organization, community and reputation to try to take advantage of buyers or sellers. That said, there are isolated cases where equipment dealers have defrauded buyers. If you want the highest assurance that you’re working with the best of the best, look for the Independent Equipment Dealers Association (IEDA) logo. That logo means they are a member a select group of carefully vetted used equipment dealers and exemplify the IEDA high ethical standards and fair business practices.
- Check the Credentials of the Seller: If you decide not to buy from an established dealer, it’s important to obtain as much information as you can about the seller before making a purchase. Ask the seller for a list of individuals who have purchased from them before and then be sure to talk to the people on that list to confirm the seller is being truthful. You should also ask the seller for other reputable business people that can vouch for them.
- Ask questions…lots of questions: Ask the person that you’re thinking about doing business with a lot of information about their organization, the machine’s condition and previous owner’s operator. You also want to make sure that the machine has been cleared for any liens — get that in writing.
- Get a written bill of sale: Good business practice requires that you get a written bill of sale from the seller when you purchase a piece of equipment.
- Finally, trust your instincts: Anytime you think “this deal is too good to be true,” it most likely is. Expect to pay a fair price for any piece of machinery that you’re going to add to your fleet. If you’re selling a piece of equipment, and the buyer doesn’t haggle or offers you more than you’re asking, you should be concerned. If something doesn’t feel right, walk away.