Auctionbytes-Update, Number 78 - September 08, 2002 - ISSN 1528-6703

Online Auction Fraud: What You Should Know, Part 3
By Ina Steiner
AuctionBytes.com
September 08, 2002

This is Part 3 of a 3-part series on online-auction fraud. Part 1 may be found at http://www.auctionbytes.com/cab/abu/y202/m08/abu0076/s02.

Part 2 may be found at http://www.auctionbytes.com/cab/abu/y202/m08/abu0077/s03

What to Do If You Are Ripped Off

Many times, problems arise over poor communications between buyers and sellers. You should do everything you can to contact the seller and resolve problems, and you can use dispute resolution services like Square Trade http://www.squaretrade.com. However, if you believe that the seller has defrauded you, you should immediately file a complaint with eBay.

You should also inform as many law enforcement agencies as you can on the federal, state, and local level, both in your area and in the perpetrator's location. You can never be sure which agency has the expertise and resources to pursue the case.
Stephen Treglia, Assistant D.A. and Chief of the Technology Crime Unit at the Nassau County District Attorney's Office in New York, recommends using escrow services to avoid auction fraud, and, whenever possible, using credit cards to make online auction purchases.
If you are a victim of fraud on eBay, Treglia said you should save every scrap of paper and every email you get. If prosecutors can determine that the seller made false representations or gave false instructions to the victim, the records can be used as evidence in a trial.

There may even be leads in the emails, he said.

Each jurisdiction is different in how they handle cases, and each state has its own laws. Treglia said he can't force a seller located outside the state come to New York to stand trial unless it is a felony crime. That is why it is important to contact state and local law enforcement officials in the perpetrator's own state as well as your own.

Summary

eBay says that the incidence of confirmed fraud on its site is less than one one-hundredth of one percent of all the listings on its site. eBay uses its insurance company's figure, using stricter definitions than an unhappy buyer might use.
Stephen Treglia agrees that fraud takes place on a very small percentage of online auctions. But, he said, "If it appears too good to be true, it usually is."

Online Auction Fraud: What to Do If You Are Ripped Off

File a complaint with eBay File a report immediately with eBay Rules & Safety: http://pages.ebay.com/help/basics/select-RS.html.
In order to be considered for eBay's Fraud Protection Program, you should also submit an Online Fraud Complaint at http://crs.ebay.com/aw-cgi/ebayisapi.dll?crsstartpage 30 days after the listing end-date.
File a complaint with the FTC https://rn.ftc.gov/dod/wsolcq$.startup$.startup
File a complaint with the Internet Fraud Complaint Center http://www1.ifccfbi.gov
Contact law-enforcement officials at the local and state level (your local and state police departments)
Also contact law-enforcement officials in the perpetrator's town & state
File a complaint with the shipper USPS http://www.usps.com/websites/depart/inspect
File a complaint with the National Fraud Information Center http://www.fraud.org/info/contactnfic.htm
File a complaint with the Better Business Bureau http://www.bbb.org

About the author:

Ina Steiner is Editor of AuctionBytes.com and author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). She has a background in marketing and research in the high-tech and publishing fields. If you have story ideas, comments or questions, send them to ina@auctionbytes.com.

Sellers attempting fraud

Unfortunately commerce can attract fraudsters, and online commerce is no different. The most common attempt of fraud may occur when a seller lists an item they don’t intend to send but accepts money for it.

We also see criminal groups trying to lure members to trade outside eBay. They typically ask buyers to make payments using Western Union because it is untraceable.

To reduce the likelihood of seller fraud:

Only use safe payment methods like PayPal. With PayPal your account information is hidden from sellers.

Never use Western Union, MoneyGram (which is prohibited by eBay) or other instant wire transfer services.

Be wary of fake Second Chance Offers. Always check your messages in My eBay for genuine Second Chance Offers.

Never trade outside the eBay site. Items purchased outside the site may not be eligible for PayPal Buyer Protection*.

Get to know your seller – check their feedback profile before making a bid or Buy It Now purchase.

Carefully read item descriptions and the seller’s terms.

Remember: If an offer sounds too good to be true – it probably is.

Don’t believe a seller who says that eBay is holding goods at its warehouse. eBay is a marketplace that brings together sellers and buyers. We never take possession of items from sellers or hold money from buyers.

Buyers attempting fraud

Although rare, a buyer may attempt fraud, usually by overpaying for an item with a fake cheque and asking sellers to send the goods with a credit for the amount "overpaid". Sometimes a buyer may attempt to persuade sellers to transact outside the eBay site.

Even though buyer fraud is rare, to reduce the likelihood:

Never trade outside the eBay site.

Offer PayPal as a payment option for buyers.

Wait for funds to clear before sending the item.

Be suspicious of buyers offering you much more than the item is worth.

Be wary of cheques or money orders, especially those from overseas institutions.

Don’t be tempted to send an item based on a buyer emailing you a receipt or "money transfer number (MTN)". This is another ruse and invariably will end up being fake.