Auction Information

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.

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.


MORE RESOURCES:

FOX43.com

Mecum Auctions Return To Harrisburg
FOX43.com
Day one of the Mecum Auctions Show kicked off Thursday morning at the Pennsylvania Farm Show Complex and Expo Center. Over the next four days, more than 1,000 collector cars and hundreds of vintage motorcycles and antique tractors will hit the ...
Mecum Auctions returns to Harrisburgabc27

all 5 news articles »


TechCrunch

Holland's Catawiki Raises $82M To Take On eBay In Collectible Auctions
TechCrunch
While eBay is doubling down on its core business after its split from PayPal, an upstart out of Europe is looking to muscle in on the business where eBay first made its name, collectibles. Catawiki, a Dutch online auction business, has raised $82 ...
'Collectibles' auction website Catawiki raises 75 million eurosThe Fiscal Times
Catawiki raises $82M to grow its online auction house for collectibles such as ...VentureBeat
Online auction house Catawiki raises $82m Series CSiliconANGLE (blog)

all 28 news articles »


A.V. Club

Sylvester Stallone auctions off Rocky and Rambo stuff to make room for new ...
A.V. Club
Sylvester Stallone is auctioning off memorabilia from the Rocky and Rambo franchises., according to ABC News. Hosted by Heritage Auctions on October 14 and 15, the auction will include lots of iconic props, including Rocky's motorcycle, gloves, and ...
Stallone puts 'Rocky,' 'Rambo' memorabilia up for auctionWANE

all 161 news articles »


Chicago Sun-Times

1860s baseball card fetches $179000 at auction
The Olympian
A circa 1860s Brooklyn Atlantics team baseball card that's been in the same family for over 150 years has fetched over $179,000 at auction. The pre-Civil War baseball card was owned by Florence Sasso of Great Barrington, Massachusetts. It shows her ...
Jenner Olympic Torch, 1860s baseball card on auction block in ChicagoChicago Sun-Times
Jenner's Olympic torch up for auctionThe Southern
1860s baseball card fetches $179000 at auction of sports memorabiliaHamiltonNews (press release) (registration)

all 68 news articles »


CNBC

Prices mixed after upbeat US growth data
CNBC
The department auctioned $29 billion in seven-year notes at a high yield of 2.021 percent, considerably lower than the June average of 2.153 percent. The bid-to-cover ratio, an indicator of demand, was 2.47, slightly higher than a recent average of 2.44.



U.S. News & World Report

Mexico ups dollar auction to $200 million to boost peso
U.S. News & World Report
FILE - In this June 25, 2002, file photo, northern Mexican musicians of "Norteno" music greet one another while waiting to be hired under a sign that reads "dollars," in Spanish in downtown Monterrey. Mexico's central bank said on Thursday, July 30 ...

and more »


Liberty Mutual, Havas Worldwide Insure eBay Auctions
MediaPost Communications
Yet up until now, there is little one can do if they lose out on an auction. Now, Liberty Mutual Insurance and eBay are teaming to create Bid Protection, a unique sweepstakes that allows eBay bidders the chance to win the eBay item they want even if ...



ESPN

William 'The Refrigerator' Perry's Super Bowl ring being sold at auction
ESPN
Chris Ivy, director of sports auctions for Heritage, said Perry sold the ring in 2000 to a collector and provided an assurance of its authenticity. In 2007, that collector sold the ring in an auction for more than $27,000, and Ivy said this latest ...
Chicago auction includes Super Bowl ring from Miami Dolphins' Bob HeinzMiami Sun Times
Former Dolphin player's Super Bowl ring a rarity at auctionSun Sentinel
Report: William 'Refrigerator' Perry auctioning off '85 Bears SB ringCBSSports.com
Yahoo Sports (blog) -TMZ.com -chi.247sports.com
all 18 news articles »


Christie's

Invitation to Consign: Hong Kong Autumn Auctions 2015
Christie's
Christie's Hong Kong Spring Auctions 2015 has achieved remarkable result of HK$3.22 billion by offering a curated selection of fine and decorative arts as well as rare wines, watches and jewellery. Over 60 auction records were broken across categories ...

and more »


Proof the CRE Auction Market Really Works
GlobeSt.com
ORLANDO—Online auctions are nothing new in the commercial real estate world. But some deals really display how effective the model can be. HREC Investment Advisors' recent disposition of five full-service hotels on the Auction.com platform is one of ...

and more »

Google News

home | site map
© 2006