What’s Internet Auction Fraud, And How Do I Prevent It?
Internet auction fraud is a growing epidemic worldwide, as online shopping has grown significantly every year that online shopping has been available. 51,000 cases of internet fraud cases were reported in 2002. In 2006, that number ballooned to 97,000. The numbers are staggering, but everyone can lower their risk by knowing what auction fraud is, how to detect it, and how to prevent falling for it.
Most internet auction fraud cases involve straightforward scams where consumers allegedly win merchandise by being the highest bidder. All sounds good until they send the payment and never receive the merchandise.
In one extreme case in 1999, a man started collecting payments and setting up new auction accounts on a daily basis. In 2001, he started setting up bank accounts and post office boxes under the names of his former victims and collected payments. It isn’t long before authorities question the two people the scammer targeted, only to find out they are dealing with identity theft on top of auction fraud.
In other cases, scammers setup fake escrow services and websites. This way, the scammers can collect merchandise as well as collect payments. The victims never suspect a thing until they have already sent their payment to the fake escrow service or sent their merchandise off to the buyer thinking the payment is safely waiting in escrow.
Sometimes auction fraud cases involve slick descriptions that are presented and worded in a way that that most people would miss important details. That’s what happened in the below video of a case being handled by Judge Judy.
A woman collected payments of $467 for 2 cell phones and sent 2 pictures of the cell phones instead of the real thing. The scammer defended herself by happily claiming that ‘what you see is what you get’, referring to the quote “you will receive pictures of these 2 cell phones” that was posted in the description along side the cell phone specs and other information aimed towards selling a real cell phone.
Thankfully Judge Judy tends not to fall for simple legalities and the case was over before it even started.
Below are some tips on keeping your risk at a minimum when purchasing items from an online auction website.
- Become familiar with the auction website. Look into the websites protection policies. Never assume you are protected from auction fraud.
- Before placing a bid, learn as much as you can about the seller. If you can’t find anything out about the seller, than avoid doing business with them. Never fall for promises of better deals by moving away from the original auction website.
- If the seller wants you to use an escrow service you’ve never heard of, look into it. Check out the website. Call up customer support. Contact us to digg up data on the business in question. If you can’t confirm the legitimacy, don’t use it.
- Never ever give out your social security number, drivers license number, credit card number, or bank account information until you have thoroughly checked out the seller and the escrow service.
- Always save 100% of the transaction information. You’ll be glad you did in the event your case makes it to court.
- If after the sale you feel the item/payment should have been delivered already, try to work it out with the seller/buyer. If at that point you feel that fraud is involved, immediately contact your state attorney general’s office and the FTC at www.ftc.gov or call toll-free 1-877-FTC-HELP (1-877-382-4357).
