Tips to Avoid Online Auction Fraud

By John Lynch
Posted Sunday, December 12, 2004

While most buyers and sellers on internet auction sites are honest, there is always the threat of underlying fraud.

Auction sites have had instances of sellers posting pictures of items for sale, only to include in extremely small print that buyers are only bidding for the photo rather than the item itself. When the photo arrives in the post and not the product, buyers are obviously outraged.

Steps to avoid online auction fraud

1)Check seller's feedback

One of the best ways to judge a seller's honesty is to check his or her feedback. Most buyers will give feedback on a sale, rating the seller in the seller's Feedback Profile. If the feedback is negative, it will be very difficult for that seller to buy or sell anything on that auction site in future. Check the seller's feedback and if it is not overwhelmingly positive, do not buy.

2)Find out seller's contact details

Before you enter into a deal, try to establish contact with the seller. On eBay you can search information on a member by visiting the Find Members page. If you can get a phone number or an email address, you have a better chance of solving any future problems. You could establish contact with the buyer by requesting further information about the nature of the product in which you are interested.

3)Payment Methods

Credit cards are the safest way to buy anything online for the simple reason that, in the case of fraud, most credit card companies will cover the cost. Online payment services such as PayPal and FastPay are also popular with auction site users because of their safety. These are account-based systems that send money via credit card or bank account.

4) Use an Escrow Service

For higher priced items you should consider an escrow service. An escrow service acts as a middleman between the buyer and the seller to ensure a fair transaction.

The escrow service holds the item and the money until the buyer has inspected and approved the goods. Only then does it release the money to the seller.

The only downside is that it will cost the buyer extra to use this service. However, it is something to bear in mind when buying more expensive items.

5) Complaints/ Fraud Protection

Most online auction sites have a complaints' procedure. For example,if you're unhappy with the goods or you have not received them, Ebay operates a fraud protection program. For more information go to :
(http://pages.ebay.com/help/community/fpp-guide.html)

FlipShark has a useful site on internet auction scams. (www.flipshark.com/scams/ebayindex.html)

The US Federal Trade Commission has a useful guide for buyers and sellers on internet auctions which has relevance to other countries. (www.ftc.gov/bcp/conline/pubs/online/auctions.htm)

To sum up, most buyers and sellers on internet auction sites are honest. However, if you use the above tips, you should not fall victim to auction fraud.

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