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Online Auction Fraud


eBay sales may have grown 51% last year over the previous year, but general online complaints jumped by 66.6% over the previous year to some 207,000+ complaints in 2004. The Internet Crime Complaint Center (IC3), a partnership between the FBI and the National White Collar Crime Center (NW3C), stated in its yearly report that 71.2% of all complaints received pertained to auctions.

Online fraud is a growing problem on the internet and the auction segment is far from immune. The IC3 reports that most complaints consist of late or no shipment of products, items that don't match advertised condition and bogus payment or escrow services.

If you decide to offer "all items to be shipped within 24 hours", make sure you keep your word, and go to great lengths to honestly represent and describe the item in your auctions. Your bidders will appreciate your honesty and it will eventually show up in your feedback.

As consumer fears increase, there are a number of common sense ways to help protect you from fraud, as well as enhance your reputation as a trustworthy seller and set you apart from the crowd.

Watch Out for Bad Checks, Money Orders and Cashiers Checks Years ago I had a buyer who complained rather loudly when I didn't ship an item as soon as I received the check in the mail. In hind site it was a good decision to hold the shipment since the check ended up being fraudulent. Bad checks, money orders, and cashiers checks are rampant in ecommerce today. The simplest way to offset the danger of bad paper is not to ship the auction item until the check, money order or cashier check clears your bank for payment.

Overpayments

Never accept any overpayments for any item. One of the more popular scams today is for a buyer to send a cashiers check for an amount that is higher than the agreed upon final price. They then claim it was in error and ask the seller to kindly return the overage when the item is shipped. Off goes the item, the overage amount in good money, and the defrauded seller finds out too late the cashiers check was fake.

Use an Escrow Service for High Priced Items

The primary purpose of escrow services is to protect buyers and sellers from fraud. Basically what they do is to accept the money from the buyer and hold it until the buyer receives and approves the merchandise. Please note that fake escrow services are increasing on the internet. If a buyer contacts you after a sale and recommends an escrow service you are not familiar with BEWARE. At present eBay only recommends one escrow company: www.escrow.com. For information go to http://pages.eBay/help/confidence/payment-escrow.html

Records, Records, Records

Keeps a copy of every transaction detail from the original auction listing to the last email. You will need that kind of proof to validate your claims if you should find you need to file a complaint.

Protect Yourself by Being Educated

At the very least you need to be knowledgeable about your legal obligations as a seller and familiar with the fraud protections and policies for the auction sites and payment processing services you use. eBay and Paypal have extensive sections on their websites dedicated to fraud policies and protections. You should take the time to read through these or similar information pages for the sites and services you use on a regular basis and be very familiar with the material.

A few of the key recommendations from Paypal's Protection for Sellers section include:

Ship only to the address listed on the Transaction Details page

Use a shipping service with tracking

Check out the buyer's reputation

Accept payment from only one Paypal account per buyer

Limit credit card payments

Enhancing Your Safe Seller Image

Here are a few tips that will help improve your image as a safe seller for your bidders.

Identify Yourself - Make use of the about me pages to let your customers know who you are, how long you've been in business and how much their business means to you. Be honest.

Feedback Ratings - Auction buyers want to see 100% positive feedback.

Methods of Payment - Make it easy for your customers to buy but consider convenience, cost and security in choosing any payment method you offer.

Full Disclosure - Your auction listings should clearly state the condition of the item you're auctioning, your shipping/insurance and return policies.

Bonding programs - A number of bonding programs are available on the internet. One of the more popular is BuySafe (www.buysafe.com). In a bonding program the seller agrees to certain obligations such as shipping on time, representing the item correctly, and standing behind the transaction. In return the seller can display a seal on their auctions showing bidders they are honest sellers and providing transaction insurance in some cases up to $25,000.

Other programs you should be familiar with include:

IDVerify
SquareTrade
Trust-e

If You Become a Victim of Online Fraud

You need to know exactly what should be done in the event you are victimized. Make your plan now, before it happens. The most recommended steps to take if you are victimized are listed below but please keep in mind these are general recommendations and you should have you own plan based on your needs.

File a complaint with your auction site
File a complaint with the Federal Trade Commission
File a complaint with the IC3
File a complaint with the National Fraud Information Center
Contact your local and state law enforcement agencies
Contact the local and state law enforcement agencies in the perpetrator's home area
File a complaint with the shipping company you used
It the perpetrator is a business and a member of the Better Business Bureau you should also file a complaint there.

Further reading

Paypal Seller Protection Policy (go to your Paypal account)

FTC recommendations http://www.ftc.gov/bcp/conline/pubs/online/auctions.htm

To read the entire 2004 IC3 Internet Fraud Report http://www1.ifccfbi.gov/strategy/2004_IC3Report.pdf

More Important Fraud Links

Find Your Local Police http://www.usacops.com
FBI Internet Fraud Unit http://www1.ifccfbi.gov/index.com
FTC Internet Fraud Unit https://m.ftc.gov
USPS Mail Fraud http://www.usps.com/postalinstpectors/fraud/

© Copyright 2005 Steven Woodward - All Rights Reserved

Steven Woodward is the owner, editor and publisher of the Auction Sellers Network (ASN); a web site for individuals and companies who are serious about utilizing the online auction marketplace for their business. In addition to topical articles, ASN provides an extensive resource center, news feeds, member forums and classified ads. For more information or to become a member please visit http://www.AuctionSellersNetwork.com

No permission is needed to reproduce an unedited copy of this article as long the About the Author tag is left intact and included. We do request that we be informed where it is posted and reciprocal links will be considered.


TODAYS NEWS BY OFFICEJAX FREE ADVERTISING AND AD EXCHANGE SOLUTIONSMORE RESOURCES updated Tue. August / 11 / 2020

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Brooks Brothers Heads Toward Sale Auction – WWD - WWD
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Virtual Auction for the Animals set for Aug. 29  Pagosa Springs Sun

Seized Fyre Festival merch sparks $805 bid with 3 days left in auction - Business Insider - Business Insider
Seized Fyre Festival merch sparks $805 bid with 3 days left in auction - Business Insider  Business Insider

BJ DRYE COLUMN: It happened at the auction - The Stanly News & Press - Stanly News & Press
BJ DRYE COLUMN: It happened at the auction - The Stanly News & Press  Stanly News & Press

Auction Life photo submissions open through Aug. 28 - Auto Remarketing
Auction Life photo submissions open through Aug. 28  Auto Remarketing

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10-year Treasury yield pops back above 0.60% as traders brace for key bond auction  MarketWatch

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Albuquerque’s only water park auctioned for $54,000  KRQE News 13

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SpeediShuttle to sell 49 vehicles in online auction  Pacific Business News (Honolulu)

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Cboe US Periodic Auction To Combat Off-Exchange Volumes  Traders Magazine

25th Annual Anne S. Thacik Auction Web site Launches - GANT News
25th Annual Anne S. Thacik Auction Web site Launches  GANT News

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Treasury ramps up auctions as borrowing, virus surges  Finance and Commerce

Michael Jordan Bulls jersey up for auction - Chicago Sun-Times
Michael Jordan Bulls jersey up for auction  Chicago Sun-Times

Brandon Lee 'Crow' Costume Sells For $25K at Auction - Hollywood Reporter
Brandon Lee 'Crow' Costume Sells For $25K at Auction  Hollywood Reporter

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Buffalo Sabres to auction game-worn 50th season jerseys  Niagara Frontier Publications

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Ballard Food Bank's 'Helpings for Hope' auction goes virtual  My Ballard

Auction move here raises virus concerns | City News - scottsdale.org
Auction move here raises virus concerns | City News  scottsdale.org

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AUCTION PREVIEWS Sun. Aug 9th Real Estate & Contents Liverpool  NNY360

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Support Huntsville Area Crime Stoppers: Virtual Charity Auction begins August 12  WAFF

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Even with Erie County Fair canceled, the animal shows and auctions go on  WGRZ.com

Clark County hosting government surplus vehicle, airport lost and found online auctions this week - KLAS - 8 News Now
Clark County hosting government surplus vehicle, airport lost and found online auctions this week  KLAS - 8 News Now

Friendship Heights Mall Heading To Foreclosure Auction - Bisnow
Friendship Heights Mall Heading To Foreclosure Auction  Bisnow

Grace Fisher painting sells for highest bid during Old Spanish Days first online auction - NewsChannel 3-12 - KEYT
Grace Fisher painting sells for highest bid during Old Spanish Days first online auction - NewsChannel 3-12  KEYT

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El Paso County foreclosure auction still happening in person, dozens gather  KFOX El Paso

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Dream Team's Signed Good Wishes to Ailing Jim Valvano Up for...  Sports Collectors Daily

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Spectacles Belonging to Gandhi Were Mailed to an Auction House–With Owner Having No Idea of Their Value  Good News Network

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Auction of Washington Wines Virtual Pt 1 - AG INFORMATION NETWORK OF THE WEST  AGInfo Ag Information Network Of The West

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The One Sports Bar & Lounge heads to auction in Curtis Bay  Baltimore Business Journal

Rotary auction slated - Hillsboro Times Gazette
Rotary auction slated  Hillsboro Times Gazette

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Spots remain open in Triple B Invitational; new auction items available  nsudemons.com

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Pheasant Run auction bringing back flood of memories  Kane County Chronicle

MusiCares Foundation announces charity auction items - The Music Universe.
MusiCares Foundation announces charity auction items  The Music Universe.

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PALs auction: $3 billion and counting  RCR Wireless News

NY state completes investigation into mock slave auction in Watertown 4th grade class - syracuse.com
NY state completes investigation into mock slave auction in Watertown 4th grade class  syracuse.com

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HiBid.com Auctions Topped $35 Million Last Week; Sports Cars, Gold Bullion, Farm Equipment, & More Up For Sale  PRNewswire

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Point Lookout estate auctions off all assets on property - By Kendra Caruso and Fran Gonzalez  Republican Journal

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$10M 'Flowing Hair' 1794 US dollar set for auction in Las Vegas  FOX5 Las Vegas

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Bidding open on Hunterdon Art Museum’s online fundraiser auction  nj.com

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Rare 1969 Adams Brothers M-505 Probe 16, like in 'A Clockwork Orange,' up for auction  Autoblog

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2016 Faraday Future FF91 prototype heads to auction - SlashGear
2016 Faraday Future FF91 prototype heads to auction  SlashGear

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Blake Shelton, Luke Combs among country stars donating to MusiCares Charity Auction  WNWN-FM

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Isiah Thomas calls out auction house to return stolen All-Star Game MVP trophy  ClutchPoints

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GNC, China's Harbin Pharmaceutical agree on sale price before auction  New Hope Network

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CSC Generation, Marquee Brands Top Fortress in Sur La Table Bankruptcy Auction  The Wall Street Journal

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Vintage BMW Motorcycles Auction: Bonhams at Barber  UltimateMotorcycling.com

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Lightning Foundation to host online auctions, 50/50 raffles in playoffs  Official site of the Tampa Bay Lightning

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Auction Report: Bonhams Announces An All-Seiko Online-Only Auction  HODINKEE

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$10M 'Flowing Hair' 1794 US dollar set for auction in Vegas  Las Vegas Sun

Former Fells Point cafe on Fleet St. headed to auction - Baltimore Business Journal
Former Fells Point cafe on Fleet St. headed to auction  Baltimore Business Journal

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Founders of YouTube and Restoration Hardware to auction historic Adirondack camp  newyorkupstate.com

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Montgomery Co. police vehicle auctions shift back in gear  WTOP

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Auction of Washington Wines Takes Events Online, Aug. 11-15  wineindustryadvisor.com

Photos: Auction Offers Chance To Own A Piece Of Threadgill's Memorabilia - KUT
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Theater at Monmouth 18th annual Silent Auction underway online  Kennebec Journal & Morning Sentinel

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Watch this: Hellgate senior hosts online auction to benefit Pov - The Missoulian
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Bid and Buy at the 2020 Nevada County Fair Online Junior Livestock and Ag Mechanics Auction this week - YubaNet
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Wine Online: How the Multimillion-Dollar Wine Auction Circuit Is Going Virtual - Robb Report
Wine Online: How the Multimillion-Dollar Wine Auction Circuit Is Going Virtual  Robb Report

1965 Shelby Mustang Sells For A Record $3.85 Million At Mecum Auctions - Forbes
1965 Shelby Mustang Sells For A Record $3.85 Million At Mecum Auctions  Forbes

Cattaraugus County, NY- Tax Foreclosed Real Estate Auction ONLINE ONLY - Bradford Era
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Auburn Fall Auction will only be open to pre-registered bidders and guests  WANE

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Livonia Steak 'n Shake restaurant goes up for sale more than a year after closing  Hometown Life

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Certified American Tokens & Medals Offered in August Heritage Auction  CoinWeek

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Seattle man wins ReStore auction for podcast sign  Huntington Herald Dispatch

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"Disneyland: The First 65 Years" – A Two-Day Auction Starting August 15, 2020  The DIS

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Barrett-Jackson moves Las Vegas and Palm Beach, Florida car auction to Scottsdale instead this fall  AZCentral

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Safe Passage, Inc. "Handbags 4 Hope" Auction Is Now Live  Eagle 99.3 FM WSCH

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US Vehicle Auction Market Outlook 2020-2024: Due to COVID-19, Online/Digital Auctions Have Become the New Norm  GlobeNewswire

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Namibia to auction fishing quota to raise money for COVID-19 medicines  Yahoo News

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