Caveat emptor is Latin for "Let the buyer beware." While we're often tempted to write off almost any bad buying experience to this principle, the fact of the matter is it doesn't apply to fraud.
It seems we've been hearing more and more about this as the farm equipment industry has experienced an unusually long period of prosperity. Bad guys are crawling out of the woodwork. You'll find one example described in our Ag Equipment Intelligence news item in this issue of E-Watch. (See "Dealers Warned About Auction Fine Print.") If you read the July/August issue of Farm Equipment, you saw another ("How Widespread is Hour Meter Tampering," p. 54-59.)
I had the opportunity to speak with the two dealers involved and both wanted us to let other dealers know what's going on out there and to be alert to these types of scams. It can happen to even the best, most experienced dealers.
In the item about fraudulent auction practices, the dealer asked not to be named but he didn't hesitate to name the auction house. He says, "I don't want to be known as the dumbest dealer in ... but I do want other dealers to know that it could happen to them if they're not careful."
He is a very experienced and successful equipment dealer and he says he should have known better. His gut told him there was something wrong with the deal, but he had a lot of used inventory to move and he was under pressure to reduce his backlog. The auction company who was soliciting his business was relentless with their phone calls and emails. He finally gave in, got busy and didn't read the fine print. In the end he got screwed to the tune of about $120,000 - a very expensive reminder to trust his gut next time.
In the case of the hour meter tampering, the dealer didn't mind having his name out there, but he didn't want to name the used equipment jockey in question. Because he ended up getting a good tractor, he wasn't interested in naming an individual as much as he was in exploring the laws that cover hour meter tampering. As it turns out, they are few and far between and enforcement is often minimal at best.
Both are writing off their experiences as lessons learned. For the rest of you, consider this a heads up. Don't let everyday busyness get in the way of doing proper due diligence. And for you experienced dealers, trust your gut and read the fine print.