This scam may have been around for awhile, but this is the first I've heard of it...
I went with my daughter to buy a car, with the original title, this July from a private owner who advertised on Craigslist. We did all of our homework--Carfax VIN check, mechanic check, fair price, signed bill of sale, etc., etc., that any average person knows how to do. All checked out fine, but I see it wasn't enough. She handed over $8,000 of her money she had saved for 14 years.
The day after the purchase we went to the DMV to transfer the title; the following day when we went to tag the car, a red flag came up. Law enforcement took the car and it is now impounded. The car had been purchased by a man from a private owner in Missouri in early July. The man used counterfeit documents and a bad check, which the owner didn't realize until a week after the bank deposit. With the real title in hand, the man brought the car to Georgia, quickly reworked his counterfeit documents and waited for someone like us.
The investigation is still ongoing, but with our overburdened law enforcement system, I don't have much hope of my daughter ever getting the car back. (I'm sure the crook is long gone from his(?) apartment complex.) I took the car off of our insurance, as it is not legally ours yet. As of today, a month later, CARFAX still doesn't show the car as being stolen, and I am not saying anything to them until the case is closed. Law enforcement says that with the constantly growing technology of computers and printers, they are seeing more and more of this tactic being used on the unwary consumer.
What we have learned so far is no one wins. State Uniform Codes are not uniform. Missouri would favor us (the original owner needs to go after the crook, not us), but Georgia Code does not address this issue and leaves it to the courts. If we had money for an attorney, we wouldn't be trying to save money by buying from a private owner. Whoever gets to keep the car and get it out of the impound will find some hefty storage fees to pay.
We have heard it all...from sympathy and "it's your car," to "let the buyer beware," "you should have checked more," "why didn't you...", "should have gone to a dealer," etc., where one begins to feel victimized over and over. It's all up in the air right now. All we can do is to help others by relaying what happened to us. Be very diligent and wary of internet information, know the private owner you are buying from, and get the police to run a VIN check before handing over your money.