Online Auction Fraud 

Online auctions are very popular with 35 million Americans participating at some stage. Most auction goers are happy with their experiences, but four in ten buyers and half of sellers claim they have encountered problems with Internet auctions. (Source: Harris Interactive survey 2001)

Many buyers pay by sending a check, cashier's check or money order directly to the seller. This is ok if everything goes well, however, if there is a problem, the money is already gone.

The most common problem for buyers is late delivery. Other problems include receiving items that are different than those promised, items arriving in damaged condition, and never receiving the items at all. Sellers report problems such as late payment, non-payment, buyer's changing their minds, checks bouncing and buyers using stolen credit cards.

Prevention:

  • Reduce the risk of Online Auctions by using credit cards for payment. This way the sellers get their money immediately, and buyers can dispute the charges if the merchandise was misrepresented or not delivered.
  • Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the sellers obligations are before you bid.
  • Find out what actions the web site/company takes if a problem occurs and consider insuring the transaction and shipment.
  • Learn as much as possible about the seller, especially if the only information you have is an email address.
  • Examine the feedback of the seller.
  • If a problem occurs with the auction transaction, it could be much more difficult if the seller is located outside the U.S. because of a difference in laws.
  • Ask the seller about when delivery can be expected and if there is a problem with the merchandise is it covered by a warranty or can you exchange it.
  • Find out if shipping and delivery are included in the auction price or are there additional costs.
  • There is no reason to give out your social security number or driver's license number to the seller.
Man looking pensively at laptop

 

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