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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 Thu. April / 22 / 2021

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Foley's Gameboards, Sevatson's Treasures Color The Walls At New Haven Auctions  Antiques and the Arts Online

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Auctions delayed for potential Samsung plant sites in Arizona - Austin Business Journal  Austin Business Journal

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City of Roanoke auctions properties in bi-annual tax sale  WDBJ7

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ACV Auctions co-founder Joseph Neiman talks about why he moved to Florida - Buffalo Business First  Buffalo Business First

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Going, going, not quite gone: How pandemic changed auctions  WBNG-TV

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Daily Mail publisher accuses Google of manipulating search results and ‘rigging’ online ad auctions  MarketWatch

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First auction of Love's Bakery goods, equipment and memorabilia underway with Oahu Auctions - Pacific Business News  Pacific Business News (Honolulu)

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Faith HS Rodeo Club's 'slave auction' stirs up controversy  Rapid City Journal

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Mapleton Lions to reformat annual auction  The County

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Auction Sales Top $39 Million Last Week on HiBid.com, with Rare Coins and Classic Cars Now Up for Bidding  PRNewswire

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Auction Of Stage & Screen Memorabilia At Doyle On April 28 - PRNewswire
Auction Of Stage & Screen Memorabilia At Doyle On April 28  PRNewswire

Local realtor starts auction business - The Herald
Local realtor starts auction business  The Herald

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How to Get Car Dealership Auction Access  Santa Clarita Valley Signal

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Hudson River School and French School oval paintings score big in Neue Auctions' April 10th online sale  ArtfixDaily

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Cosmic: 400+ Film Treasures to Land at a Mega Auction  NBC Southern California

Toledo police are holding online vehicle auction - Toledo Blade
Toledo police are holding online vehicle auction  Toledo Blade

Love's Bakery auction includes vintage aloha shirts, signs - Albany Times Union
Love's Bakery auction includes vintage aloha shirts, signs  Albany Times Union

Auction Calendar: April 23, 2021 - Wisconsin State Farmer
Auction Calendar: April 23, 2021  Wisconsin State Farmer

Link to libraries virtual gala and online auction begins April 22nd - WWLP.com
Link to libraries virtual gala and online auction begins April 22nd  WWLP.com

Bidding open for City of Moorhead online auction - Valley News Live
Bidding open for City of Moorhead online auction  Valley News Live

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TREASURIES-Yields stable despite strong 20-year bond auction  Reuters.com

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Brazil slashes its own take in Atapu, Sepia subsalt auction  S&P Global

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Eddie Van Halen's 1934 Ford is red hot and up for auction  Fox News

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Bitcoin Magazine's Art Director To Auction Guy Fawkes Painting For Bitcoin  Bitcoin Magazine

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GSA to Auction Off Bitcoin  FEDweek

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Ticket from Tiger Woods' pro debut in Milwaukee will fetch thousands at auction  Appleton Post Crescent

Bidder Pleads Guilty to Rigging Bids at Online Auctions for Surplus Government Equipment - Department of Justice
Bidder Pleads Guilty to Rigging Bids at Online Auctions for Surplus Government Equipment  Department of Justice

Twenty-Year Bond Auction Attracts Modestly Above Average Demand - Nasdaq
Twenty-Year Bond Auction Attracts Modestly Above Average Demand  Nasdaq

Public Auction | Legal Announcements | dothaneagle.com - Dothan Eagle
Public Auction | Legal Announcements | dothaneagle.com  Dothan Eagle

Central Bank Faces Key Auction as India’s Traders Balk at Yields - Yahoo Finance
Central Bank Faces Key Auction as India’s Traders Balk at Yields  Yahoo Finance

Stratford auction continues online - Rappahannock Record
Stratford auction continues online  Rappahannock Record

TCA to Hold Kentucky-Focused Auction April 29-May 1 - BloodHorse.com
TCA to Hold Kentucky-Focused Auction April 29-May 1  BloodHorse.com

Art With Heart virtual auction raising money for Children's Minnesota - KSTP
Art With Heart virtual auction raising money for Children's Minnesota  KSTP

RESULT OF RIKSBANK REVERSED AUCTIONS TREASURY BILLS - Yahoo Finance
RESULT OF RIKSBANK REVERSED AUCTIONS TREASURY BILLS  Yahoo Finance

Analysis: Big US Treasury auctions could restart rise in yields - Reuters
Analysis: Big US Treasury auctions could restart rise in yields  Reuters

Rogers Revenue Beats Ahead of Critical 5G Spectrum Auction - Bloomberg
Rogers Revenue Beats Ahead of Critical 5G Spectrum Auction  Bloomberg

With Retrospective on View, Yoshitomo Nara to Lead Phillips Hong Kong–Beijing Auction - ARTnews
With Retrospective on View, Yoshitomo Nara to Lead Phillips Hong Kong–Beijing Auction  ARTnews

Auction business wins rezoning bids | News | goshennews.com - Goshen News
Auction business wins rezoning bids | News | goshennews.com  Goshen News

Red Wings excited to announce #LGRW Online Auction - BlueJackets.com
Red Wings excited to announce #LGRW Online Auction  BlueJackets.com

Q&A: George Church’s Genome Up for Auction - The Scientist
Q&A: George Church’s Genome Up for Auction  The Scientist

Thurtene hosts benefit art auction this weekend | The Source - Washington University in St. Louis Newsroom
Thurtene hosts benefit art auction this weekend | The Source  Washington University in St. Louis Newsroom

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Maine gets more than $4M from cap and trade auctions  WABI

Weirton Kiwanis John B. Sorrenti Sr. Facebook auction is April 26-28 - The Steubenville Herald-Star
Weirton Kiwanis John B. Sorrenti Sr. Facebook auction is April 26-28  The Steubenville Herald-Star

1991 Isdera Imperator 108i Heads to Auction Autoweek Autos - Autoweek
1991 Isdera Imperator 108i Heads to Auction Autoweek Autos  Autoweek

Parents pack Aledo ISD meeting after racist Snapchat group and slave auction flyers - WFAA.com
Parents pack Aledo ISD meeting after racist Snapchat group and slave auction flyers  WFAA.com

Def Leppard Auction Goes Inside Rick Allen's Arm Loss - Ultimate Classic Rock
Def Leppard Auction Goes Inside Rick Allen's Arm Loss  Ultimate Classic Rock

Paterson, facing $800K in cleanup costs, seeks to auction contaminated Leader Dye site - NorthJersey.com
Paterson, facing $800K in cleanup costs, seeks to auction contaminated Leader Dye site  NorthJersey.com

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Auction bidding now open in HSJGA, First Tee-Hawai'i fundraiser - The Garden Island
Auction bidding now open in HSJGA, First Tee-Hawai'i fundraiser  The Garden Island

Cadillac Oasis Family Resource Center to Host Survivors Auction in Place of Celebrate Women Event - 9 & 10 News - 9&10 News
Cadillac Oasis Family Resource Center to Host Survivors Auction in Place of Celebrate Women Event - 9 & 10 News  9&10 News

Wichita Mountains Wildlife Refuge holding 78th annual Longhorn Cattle Auction - KSWO
Wichita Mountains Wildlife Refuge holding 78th annual Longhorn Cattle Auction  KSWO

Northgate Mall in Durham will soon be torn down. Here’s how you can get a piece of it. - Raleigh News & Observer
Northgate Mall in Durham will soon be torn down. Here’s how you can get a piece of it.  Raleigh News & Observer

The Estate Of Dave Prowse Auction - TheForce.net
The Estate Of Dave Prowse Auction  TheForce.net

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Jasper County CASA to hold online auction  KSNF/KODE - FourStatesHomepage.com

Arizona sites eyed by Samsung for $17B plant head to auction - Austin Business Journal
Arizona sites eyed by Samsung for $17B plant head to auction  Austin Business Journal

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Eddie Van Halen ‘Frankenstrat’ Guitars Hit the Auction Block  Rolling Stone

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Andrew Lloyd Webber to Auction Off Notable ‘Phantom of the Opera’ Prop  Rolling Stone

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World’s largest vintage motorcycle auction returns April 28  KTNV Las Vegas

Auction details treasury bills Stockholm Stock Exchange:0363490ZSS - GlobeNewswire
Auction details treasury bills Stockholm Stock Exchange:0363490ZSS  GlobeNewswire

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State Land Department postpones auction of 1099 acres in Goodyear  Your Valley

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Tifton prepares for surplus auction, approve film making permit  WALB

Church joins the NFT craze with plans to auction off his genome - FierceBiotech
Church joins the NFT craze with plans to auction off his genome  FierceBiotech

Auction fundraiser for St. Agnes going the virtual route - Islander News.com
Auction fundraiser for St. Agnes going the virtual route  Islander News.com

Brazil sets new terms for transfer of rights surplus auction - Reuters
Brazil sets new terms for transfer of rights surplus auction  Reuters

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This Pile of Twisted Metal at a Salvage Auction Used to Be a 2005 Ford GT  The Drive

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Cornhole tournament, auction to raise funds for church's addition  Imperial Republican

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Concerts, fine arts, auction add up to busy week  Charleston Post Courier

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Google’s Secret ‘Project Bernanke’ Revealed in Texas Antitrust Case  The Wall Street Journal

U.S. Treasury auctions to test demand after volatile trading - Reuters
U.S. Treasury auctions to test demand after volatile trading  Reuters

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Enumclaw Rotary hosts first-ever online auction next week | Courier-Herald  Enumclaw Courier-Herald

Forgotten Copy of Super Mario Bros. Sets Record at Auction - The New York Times
Forgotten Copy of Super Mario Bros. Sets Record at Auction  The New York Times

1972 Chevy Vega Wagon With Just 32 Original Miles Headed To Auction - GM Authority
1972 Chevy Vega Wagon With Just 32 Original Miles Headed To Auction  GM Authority

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Arts for All Amazing April Auction Raises Money for Scholarship Program and Studio Classes - 9 & 10 News  9&10 News

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Royal Mint and Elton John announce charity auction - celebrating the artist's greatest hits  PRNewswire

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Wassenberg's Online Auction winding down  Times Bulletin

Bat Used by Lou Gehrig in 1938 Sells at Auction for $715,120 - The New York Times
Bat Used by Lou Gehrig in 1938 Sells at Auction for $715,120  The New York Times

JPD evidence vault items, seized vehicles up for auction - WAPT Jackson
JPD evidence vault items, seized vehicles up for auction  WAPT Jackson

MGC celebrates spring with annual brunch, plant auction - The Franklin Sun
MGC celebrates spring with annual brunch, plant auction  The Franklin Sun

San Diego County has 279 properties up for auction. Here's the list - CBS News 8
San Diego County has 279 properties up for auction. Here's the list  CBS News 8

Fund-Raising Auction Set For Racer Mom Karen Deutschlander - RoadracingWorld.com
Fund-Raising Auction Set For Racer Mom Karen Deutschlander  RoadracingWorld.com

ACV Auctions' strong debut on Nasdaq fuels hope for local startups - Buffalo News
ACV Auctions' strong debut on Nasdaq fuels hope for local startups  Buffalo News

KAR Auction Services, Inc. to Announce First Quarter 2021 Earnings - Yahoo Finance
KAR Auction Services, Inc. to Announce First Quarter 2021 Earnings  Yahoo Finance

2021 St. Jude Online Auction is Now Live! - Monster Energy Supercross
2021 St. Jude Online Auction is Now Live!  Monster Energy Supercross

Spanky’s Amarillo Collector Car Auction set by Assiter Auctioneers - EIN News
Spanky’s Amarillo Collector Car Auction set by Assiter Auctioneers  EIN News

Used car dealers sue over alleged 'shill bidding' in ACV's auctions - Buffalo News
Used car dealers sue over alleged 'shill bidding' in ACV's auctions  Buffalo News

Ogdensburg seeks to sell 20 vacant parcels of land at city auction - NNY360
Ogdensburg seeks to sell 20 vacant parcels of land at city auction  NNY360

Museums Send Deaccessioned American Art To Auction, While One Sells Privately For New Acquisitions - ArtfixDaily
Museums Send Deaccessioned American Art To Auction, While One Sells Privately For New Acquisitions  ArtfixDaily

SEF sets silent auction fundraiser - Sequim Gazette
SEF sets silent auction fundraiser  Sequim Gazette

Florida to hold online auction to sell unclaimed property - Wink News - Wink News
Florida to hold online auction to sell unclaimed property - Wink News  Wink News

Iconic Classic Car Collection In Central Nebraska Up for Auction | netnebraska.org - NET Nebraska
Iconic Classic Car Collection In Central Nebraska Up for Auction | netnebraska.org  NET Nebraska

Saints Athletic Association plans Fajita Fest Drive Thru and Online Auction - Napa Valley Register
Saints Athletic Association plans Fajita Fest Drive Thru and Online Auction  Napa Valley Register

Baseball Cards Go Crypto as Auction Houses Warm to New Currency - Bloomberg
Baseball Cards Go Crypto as Auction Houses Warm to New Currency  Bloomberg

BigIron Auctions to Host Classic Car and Motorcycle Auction Featuring Chevyland USA Inventory - GlobeNewswire
BigIron Auctions to Host Classic Car and Motorcycle Auction Featuring Chevyland USA Inventory  GlobeNewswire

Online Onion Seller Rises from Domain Auction - Practical Ecommerce
Online Onion Seller Rises from Domain Auction  Practical Ecommerce

Ritchie Bros. keeps rolling with US$55+ million regional auction in Northeast US - PRNewswire
Ritchie Bros. keeps rolling with US$55+ million regional auction in Northeast US  PRNewswire

Matthew Tkachuk of Calgary Flames is first NHL player to release NFT, will auction it off for charity - ESPN
Matthew Tkachuk of Calgary Flames is first NHL player to release NFT, will auction it off for charity  ESPN

Beverly Park mansion sells at auction for record $51 million - Los Angeles Times
Beverly Park mansion sells at auction for record $51 million  Los Angeles Times

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