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Selling your car in the UAE? Be aware of potential fraudsters


Be extra vigilant when selling your car

A growing number of vehicle sellers are falling prey to sophisticated scammers posing as car buyers

RSA’s claims team have noticed a worrying rise in automotive fraud recently, with a number of our car insurance customers getting in touch following the ‘theft’ or in this case fraudulent acquisition of their vehicles in the UAE. Just in the past few months alone, more than six cases have been brought to the attention of RSA customer service staff and this type of fraud is on the increase.

The victims of these scammers include people from all walks of life, such as executives and CEOs. Unfortunately, it is the car sellers who end up paying the high price for not being on guard, as car insurance does not cover fraud.

How the sting works

Popular online classifieds site are being targeted by scammers, who deliberately seek out car sellers.

A typical scenario might unfold like this: A female fraudster contacts the motivated seller, who may be selling a high-value car due to relocating.

The woman arranges to send an accomplice posing as a car technician or her husband to inspect the car. In some cases, the scammer posing as the husband asks to take the car for a test drive, makes off with the car and never returns. The seller realizes they have been duped when the buyer never returns from the test drive but by then it is already too late: the car and scammer vanish without trace.  

In other cases, the buyers hand over a cheque, mentioning that the husband has a busy high-profile job and cannot access the cash so quickly. The scammers presents as a highly respectable and well-to-do family; they sometimes arrive at the car viewing in a very expensive car, which may also reassure the seller that they are trustworthy people. They appear to have valid ID, passports and other convincing documents that further give them a false veneer of authenticity.

These scammers are extremely believable and have, on several occasions, been able to convince sellers to give up their vehicle. It is only once the ownership of the vehicle has been transferred that it transpires that the cheque is from a dormant account and the funds do not clear.

One victim, an airline pilot, handed over the keys to his car, which means that the crime cannot be deemed a theft or a robbery by insurance companies, and he is liable for the full sum of his outstanding car loan of over AED100,000.

Why doesn’t car insurance cover fraud?

Car insurance generally covers things such as accidents, external fires, and even deliberate damage by a third party. It will also cover robbery and theft. However, if the owner of a vehicle willingly surrenders possession of the car through transferring ownership at RTA, or hands over the keys for a test drive, that is not deemed a robbery, but is classed as fraud.

The crucial difference is whether the car owner willingly gives up possession of their vehicle, whether through ownership transfer or by handing over the keys. If he or she is threatened, it is robbery. If they hand over the keys because they believe the scammer to be genuine, that is classed as a fraud.

Insurance doesn’t cover fraud.

In your RSA insurance policy, there is guidance about taking reasonable precautions to keep the vehicle safe; in addition RSA advises that insurance may be invalidated if the vehicle is transferred without prior written consent of the insurer.

Unfortunately, if keys to a vehicle are willingly handed over, this is not classed as ‘robbery’ because the owner voluntarily gave them up. It is then classed as fraud, which insurance does not cover. This leaves the car owner liable for any outstanding loans on the vehicle.

How can I protect myself?

1. Cash before keys

When selling a car, ensure you have the full payment before you hand over the keys. Don’t rely on an un-cleared cheque, even if it is presented to you in an official manner with supporting documents. Cash is always safest, but if a bank transfer or cheque deposit must be used, ensure it has fully cleared into your account before proceeding further. Scammers may employ high-pressure tactics, such as claiming that they are in a hurry and will have to cancel the lucrative sale if you do not comply. This kind of behavior alone should be taken as a red flag warning. Ask yourself: who really needs to complete a car purchase in such a short space of time? If the seller is genuinely keen on your car, they can wait a couple of days. Do not let yourself be rushed.

2. Keep the car with you

Don’t allow the buyer to test-drive your vehicle without you in the vehicle at all times. Sit in the passenger seat and ideally have a friend in the back. When all parties are exiting the vehicle, ensure you have the keys in your hand before exiting, as some fraudsters have been known to speed off as soon as the owner steps outside the car. Do not accept a post-dated cheque or a verbal agreement to meet the next day to complete the purchase. Scammers may offer you a cash deposit or cheque to make themselves appear legitimate; however you should never release your car into another person’s custody as this will invalidate any insurance claims if the car is then not returned to you.

3. Anyone can be a victim

Fraudsters can deceive even the smartest people. Scammers are very skilled at manipulating people from all walks of life, employing an arsenal of convincing tricks from convincing documents such as passports and ID, to conveying an air of trustworthiness and respectability. Don’t assume that you will never be targeted. There are several things you can do, such as avoiding meeting late at night, double checking all ID and other documents and not letting yourself be rushed into accepting cheques or handing over keys.

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