The National Automobile Dealers’ Association (NADA) is warning consumers against a surge in sophisticated digital scams, particularly in the pre-owned vehicle space.
Scammers are now leveraging generative AI and digital manipulation software to produce realistic vehicle listings, official-looking dealership and banking identities, and even clone voice and video messages, making online vehicle fraud harder to detect than ever before.
According to Vice-Chairperson of NADA, Thembinkosi Pantsi, the generative AI has made it easier for fraudsters.
“In the past, poor grammar, blurry images, or inconsistent branding were easily noticeable red flags. Today, scammers are using AI to instantly generate legitimate looking advertisements, complete with convincing email and social media profiles. What looks like an unbeatable deal online can now quickly turn into a devastating financial loss.”
Red Flags in the AI Era
- Bypassing a bank auction: Fraudsters claim they can secure a repossessed vehicle prior to a bank auction for an upfront holding fee. In South Africa, repossessed vehicles are strictly handled via accredited auction houses – never via private messaging apps.
- Pressure for immediate deposit: Scammers create a false sense of urgency, insisting on an Electronic Funds Transfer (EFT) to “hold” the vehicle to avoid the sale going to other alleged interested buyers.
- Refusal of in-person viewing: While AI can generate convincing photos or pre-recorded videos, scammers will consistently make excuses to avoid an in-person viewing at a verifiable physical location.
Protecting Your Purchase
“The single best safeguard for consumers in today’s digital landscape is accountability. Transacting through an established and accredited car dealership provides statutory protection under the Consumer Protection Act (CPA) and provides the peace of mind that comes with knowing that the seller is legitimate and the vehicle has undergone proper background, ownership, and technical checks,” said Pantsi.
“Furthermore, consumers should remember that technology works both ways,” he highlights. “Although AI has been used in nefarious practices, it can also be a powerful tool for consumer protection. Buyers can leverage search tools and AI models to cross-reference reviews, complaints, compliments, and warnings that others may have posted about a potential seller, as well as check a company’s history and customer feedback as part of the due diligence required for any vehicle purchase.
“Before parting with your hard-earned money, ensure you use every resource available to verify who you are dealing with, and always prioritise reputable, professional car dealers with a physical footprint and a proven track record.”
