The Mustang fans researched a car they found on trovit.com for three months, thinking it was being shipped from Poland. At every turn, everything seemed legit.
What they hadn't counted on was an entire shipping company being fake. I've written about fake websites before, and even fake government agencies overseas that legitimise fraud, but this scam took things to a whole new level.
It got to the point where the couple could even track the shipping of the car all the way from Europe, watching their classic Mustang apparently come into port. And then, it didn't. The couple found themselves empty handed, their money gone.
To add insult to injury, the fictitious Ford was put back online for sale all over again. The fraud continues.
Debt plus fraud equals… only debt
Debt always brings risk with it, both to the lender and the borrower. Lenders protect themselves by tying a loan to something secure like a house, or hiking up the interest rate to cover potential losses.
We borrowers often don't shield ourselves so well. If our situation changes (redundancy, separation, fraud), we are left trying to repay.
When it comes to gearing – borrowing in order to invest – it becomes even more risky for us if the shares (or classic cars) suddenly plunge in value or become worthless.
In the case of the missing Mustang, there is still the $47,500 loan to repay. There was no way to insure the car until it landed.
But of course that's not all: without taking into account setup costs, let's say interest on the loan is 5% over five years – that makes the damage more like $53,700.
The Mustang debt still stands, even though the car was a phantom.
Thou shalt not send money overseas
Remember those old fire-and-brimstone edicts that used to tell us what to do and what not to? You know, the Moses ones etched in stone, like "Thou shalt not kill".
Sure, commandments were a bit blunt and may not have applied to every situation (hunting or wartime, for instance), but it was pretty clear most of the time what not to do, right? And sure, some would flout the rules, but most would accept them as common sense and part of the culture.
Well, we might as well have a new one to keep us from the fraudsters: "Thou shalt not send money overseas, people!"
Once you send cash beyond our borders, whatever it's for (romance fraud, inheritance fraud, classic cars), there's frighteningly little that banks or authorities can do to get it back for you. They have limited power or leverage.
It's gone, just gone. And although the money was borrowed and lost, the debt remains to be repaid.
- Get Sorted is written by Sorted's resident blogger, Tom Hartmann (@TomHartmannNZ). Check out the guides and tools from Sorted – brought to you by the Commission for Financial Capability – at sorted.org.nz.
