A straw purchase is any purchase whereby the purchaser is knowingly acquiring an item or service for someone who is, for whatever reason, unable to purchase the item or service themselves.
A straw purchase is not per se illegal in most cases, except as noted below. For example, someone may purchase an automobile for another who, due to poor credit, cannot purchase it themselves. The purchase is not illegal; however most financial institutions (ie Banks) have very strict policies regarding this unscrupulous practice; if the other party defaults on payment, the original purchaser would be liable for the debt even if s/he could not collect the debt and/or repossess the car from the other party.
However, the term is widely used within the context of United States federal gun laws, whereby a straw purchase is defined as any purchase from a dealer holding a Federal Firearms License where the buyer conducting the transaction is acting as a proxy for another person. The law does not distinguish between someone who is purchasing on behalf of a person who legally cannot purchase or possess a firearm, and one who is not. In the United States, straw purchases are a felony violation of the Gun Control Act of 1968 for both the straw purchaser (who can also be charged with lying on Federal Form 4473) and the ultimate possessor. One of the questions on form 4473 is “I am the buyer of this firearm” and the purchaser must answer honestly yes or no, by checking the appropriate box in ink. However, purchase of a firearm as a bona fide gift for someone who can legally own such a firearm is permitted.
Many gun shops have jointly participated in programs (such as: “Don’t Lie For The Other Guy”) to deter such purchases.
Another example of an illegal straw purchase involves alcohol; these purchases are particularly common as persons under the drinking age (21 in the United States) frequently request that a person above the legal age purchase alcohol for them. If intent can be proven, this action is illegal and punishable according to state and federal law.
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