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How to Avoid Online Auction Fraud
by Dave Bromley
The popularity of online auctions is growing at a phenomenal rate.
Ebay, the market leader has over 60 million registered users and
in the USA over 155,000 people claim that selling on Ebay auctions
is their main source of income. However, the great fear that many
people is that if they buy or sell through online auctions they
are leaving themselves open to be defrauded.
In realty the chances of being scammed on Ebay are quite low, in
fact Ebay claim that only 0.01% of all transactions can be considered
fraudulent. In fact for most people any problems that do arise can
usually be put down to misunderstandings rather than deliberate
fraud.
If you are a buyer the starting point is to check out the sellers
feedback record. This is the self-regulating system whereby buyers
and sellers give each other either positive, neutral or negative
feedback after each transaction. The higher the positive feedback
the better but don’t just take it at face value because it
is possible to build up a high feedback by buying low cost items.
Recently in the USA a woman quickly built up a good feedback this
way and then listed a great number of high ticket priced items and
then disappeared with the cash. The good news is that she did get
caught but I do not know whether the money was refunded or not.
Many problems arise because we do not read the listing correctly.
The other day I though I was bidding for an audio tape program on
Ebay.co.uk which I won but when it arrived it turned out note to
be an audio tape but a soft back book. But when I re read the listing
it became obvious what was being sold. You have to be particularly
careful when you are buying things such as cameras and electrical
equipment. Research the item and model numbers and if possible go
to the shops and inspect a similar item in a shop.
There have been many cases when having won the auction the buyer
finds that the seller has asked for an extortionate amount for postage
and shipping. Some sellers set a low minimum price, this way they
get away with a low listing fee and load the profit into their postage
costs. What can appear a bargain can become an expensive purchase
when you add £7 or £8 on for shipping.
There is nothing stopping you contacting the seller before placing
a bid, in fact Ebay’s
“Question for Seller” system makes this very easy. Make
sure you understand what if any guarantees or return policies are
in place. Check which payment methods the seller will accept. Avoid
electronic transfers and if it is an expensive item you might consider
using an escrow service. This is where a third party holds the money
until both buyer and seller declare themselves happy with the transaction.
You will have to pay for this service but it can be worth it just
for the piece of mind. For most purchases I like to use Paypal as
this allows an instant transfer of funds.
Other common sense precautions you should take are to make sure
that you do not disclose any unnecessary personal information. Never
tell anyone passwords, credit card details and the like. Also get
into the habit of printing out all relevant documents
and keeping them in case of any dispute over the transaction.
As I said in the opening paragraph the occurrences of deliberate
fraud are low and most online auction companies take very positive
steps to combat it. If you ever feel that someone has attempted
to “rip you off” then report it immediately. But if you
follow the guide lines laid down in this article the chances of
you being defrauded is pretty low, so if you have not tried online
auctions yet, why not give them a try because they are a great way
to dispose of any surplus items that you may have and there are
also a lot of bargains that you can buy.
Dave Bromley is the author of “How to make Big Money
on Ebay Auctions” and is one of the leading UK writers on the
subject of On line Auctions.
You can sign up for his free twice monthly newsletter and
6 part mini course on his website at www.ukauctionline.co.uk.
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