When Andrea Hammond decided to buy a Tesla 3 electric vehicle, her choice was not about the car's slick design or prestige badge.

"Spending that amount of money was not an easy decision, but my commitment to wanting to drive without polluting the atmosphere was my motivation," she said.

At first, the process of buying a Tesla seemed as modern as the car itself.

With no showroom in Perth at the time, Andrea booked a test drive online and made a deposit through the company's website.

What happened next was a decidedly modern crime, brought about by a method of payment that is rapidly becoming outdated.

Rather than making her final payment of $74,647.62 through Tesla's secure website, she was sent an email from the company, with an invoice attached.

That invoice was intercepted by hackers and the bank details changed.

Andrea unknowingly paid the money to a fraudulent bank account instead of Tesla, sending her money straight into the hands of scammers.

"I absolutely cannot understand why Tesla don't do the invoicing in the payment system through a secure website," she said.

 

Paying for a Tesla

Tesla's dominance of the electric vehicle market has turned the company into a global juggernaut and a stock market darling.

The company said it delivered a record 184,800 vehicles globally during the first quarter of 2021 and investors have been keen to get on board.

Tesla is by far the biggest-selling electric car brand in Australia. Although it does not release its sales figures, media reports of car registrations suggest Telsa has sold almost twice as many electric cars in Australia as all other EV brands combined.

Andrea is not the only Australian who has lost thousands of dollars trying to buy a Tesla.

A successful Sydney businessman, who does not want to use his real name due to concerns for his professional reputation, has also been scammed.

Ron - another victim customer of Tesla, said the company emailed him on a Friday afternoon in September 2019 to let him know his Tesla 3 had arrived, with details of where to send the money.

"I should have checked the bank account details on the invoice by telephoning Tesla directly, but there was no phone number readily available to ring or to contact them," he said.

"They wanted payment quickly because the vehicle had become available, so I paid the invoice."

Again, the money did not go to Tesla.

While there is no law forbidding businesses sending large invoices over email, Ron believes a company like Tesla should know better.

"The issue I have with Tesla, in my opinion, is that they have failed in their duty of care to their customers by using what is clearly — and certainly one can see this in hindsight — an insecure way and a risky way of requesting payment for the vehicles," he said.

 

Questions:

 

1.  Do you think that the senior management of Tesla clearly recognized the importance of its payment receiving process? What kind of information do you think Tesla needs to manage and improve its payment process?
2.  What precautions or controls could Tesla management introduce to stop hackers from being taken advantage of in a situation like this? 
3.  Were there any symptoms or indications of fraud present in this case? 
4.  Name various regulatory bodies and fraud preventive agencies in Australia which could help victim customers of Tesla in recovering their amounts?