Auctions - Online Auction Fraud

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 ChecksYears 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.com/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.

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/

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.

Car Insurance | Car Rentals | Health Insurance | Weight Loss | Life Insurance

| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |

Five Ways To Detect Shill Bidders On Ebay So That You Dont Pay Absurd Prices
There is as a lot of buzz about shill bidders on the eBay forums. But in actuality, shrill bidding isn't that common and is rather easily detected.A buyer will sometimes attempt to use shill building to raise the price of merchandise he is selling. T...(related: Auctions)

Attract Ebay Buyers Like Crazy!
As an ebay(TM) seller it happens very often (too often) that listings close without any bids. Did this happen to you? Many sellers are frustrated and quit their eBay(TM) business. Have you realised that these fees from unsold items can sum up quickly. We asked ourself: "What are the reasons for so many items not being sold on eBay(TM)?"We did some research on compared many listings on eBay and to see which sites get the most hits. Of course the item itself plays an important role. But we have also found that many ebay(TM) sellers try to sell their items with very unprofessional...(related: Auctions)

Fed Up With Ebay?
For many people, their first experience of working online involves selling products on eBay. This was how I got started back in 1998 and I know countless other people that have done the same.However, it is important to remember that eBay is not the 'be all and end all' - there is a much bigger online world out there. My reason for mentioning this is that I have spoken to three people this week who each make a decent full or part-time income on eBay but who are fed up with it and looking to move in other directions.Having sold on eBay myself, I can understand why sellers do get tired/bored/frustrated with the auction site - it is highly competitive and it takes an incredible amoun...(related: Auctions)

How I Was Nearly Conned On Ebay
I am not sure how many people have had bad experiences on Ebay, I hope not too many. I was having a great time on there until some man tried to defraud me out of Ł170.I had been buying and selling on Ebay for a number of months without any problems at all. If I ever bought anything that cost over Ł100, I would offer to meet the seller somewhere, normally just off the motorway and this was working very well. I m...(related: Auctions)

Drop Shipping Your Way To Increased Profits
Drop shipping, for those who are unfamiliar with it, is a system whereby you promote the products of a particular manufacturer, take orders directly, and the manufacturer/source handles all the inventory and fulfillment functions for you.In a nutshell, here is the drop-ship system:>You generate and accept the order.>You take your profits out of the sale price.>...(related: Auctions)

Game Theory, Nobel Prize, & Auctions - Auction Primer Series ? Part 1
William Vickrey, highly regarded as the founder of auction theory, was an economics professor at Columbia University when he published two papers outlining his views on auctions:"Counterspeculation, Auctions, and Competitive Sealed Tenders", 1961, Journal of Finance"Auction and Bidding Games", 1962, Recent Advances in Game TheoryIn 1996 he received a Nobel Pr...(related: Auctions)

Make Big Money On Ebay - Your Unlimited Cash Cow
Let me be brutally honest; until recently, I had never bought anything on eBay, I'd never sold anything on eBay, and, dang-nab-it, I disdained auctions. (Bidding wars just weren't my bag. I was a lover, not a fighter.) But one fine day, everything was about to change.So if you're searching for an honest, easy way to make cash-in-a-flash and lots of it, then read on dear web-surfer.My life as usual suddenly took a dramatic U-Turn the day my best buddy seemed to be channeling a tenacious Tom Cruise. The resemblance was uncanny! But the re-enactment of a famous scene from the hit movie Jerry McGuire certainly...(related: Auctions)

Join The Home-based Business Revolution

Greetings, Friend.

So you've decided to go into business. Great. Now what?

If you're like most new internet, home-based entrepreneurs, you have no idea. Let not your heart be troubled!

There are many ways to run a home-based business on the internet, none of which are easy. Don't be fooled - there is a lot of hype out there, and those "overnight success" promises you'll find that are so prevalent on the internet these days are, in fact, to good to be true. I know, because I tried many of them. But did...(related: Auctions)