Auction Frauds and Scams Commonly Used on eBay, PayPal, etc.

Auction Frauds: Scams Used on Auction Sites, Like eBay.

Auction fraud involves fraud via the misrepresentation of a product advertised for sale through an Internet auction site (like Ebay) or the non-delivery of products purchased through an Internet auction site. In other words, either the product you ordered isn't what the seller claimed it was, or the seller fails to deliver it, or the seller lies about some other aspect of the transaction.

Auction fraud is the most prevalent of Internet crimes associated with Romania. Romanians, long famous in crime circles for gypsies and conmen, have saturated the Internet auctions and offer almost every in-demand product. Typically, they act more flexible than most sellers, allowing victims to send half the funds now, and the other half when the item arrives.

The FBI published these statistics:

"Internet auction fraud was by far the most reported offense, comprising 44.9% of referred complaints. Non-delivered merchandise and/or payment accounted for 19.0% of complaints. Check fraud made up 4.9% of complaints. Credit/debit card fraud, computer fraud, confidence fraud, and financial institutions fraud round out the top seven categories of complaints referred to law enforcement during the year."

For the full report, go to the IC3 webpage on statistics.

In an typical scam, the auctions are often posted as if the seller is a United States citizen, then the subject advises the victim to send the money to a business partner, associate, sick relative, a family member, etc., usually in a European country. The money is usually requested to be transferred via MoneyGram or Western Union wire. But the seller will often say that the buyer's funds can not be released until the buyer provides the money transfer control number (MTCN) or the answer to a "secret question"; and therefore the buyer can wait until he receives the product before releasing the money.  That is nonsense.

In order to receive funds via Western Union, the receiver need only provide the complete information of the sender (buyer) and the receiver's (seller's) full name and address. The funds can be picked up anywhere in the world using this information. There is no need to provide the any other information. Once you have wired the money, it is gone. Money sent via wire transfer leaves little recourse for the victim.

The most recent trend is a large increase in bank-to-bank wire transfers. Most significantly, these wire transfers go through large United States banks and are then routed to Bucharest, Romania or Riga, Latvia.

Similarly, the sellers also occasionally direct the victims to pay using phony escrow services. You may think it is a real, legitimate service, but, usually the site is a spoof, a fake, that resembles the real one and is created and controlled by the scam artist. Once the funds are wire transferred to the escrow website, the seller disappears. Also see Escrow Fraud.

Warning signs

Some clues that a fraud is about to be committed against you are the following behaviors:

If you are the buyer:

  • Whoops! I'm no longer in the U.S. - The seller posts the auction as if he resides in the United States, then responds to victims with a congratulatory email stating he is outside the United States for business reasons, family emergency, etc. Similarly, beware of sellers who post the auction under one name, and ask for the funds to be transferred to another individual.
  • Wire me the money! - The seller requests funds to be wired directly to him/her via Western Union, MoneyGram, or bank-to-bank wire transfer. By using these services, the money is virtually unrecoverable with no recourse for the victim.
  • I'm the manufacturer's dealer in ____ - Sellers acting as authorized dealers or factory representatives in countries where there would be no such dealers should be avoided.

If you are the seller

  • Oh, ship it to me this way, so I can avoid customs - Buyers who ask for the purchase to be shipped using a certain method to avoid customs or taxes inside another country should be avoided.
  • Ship it to me here - Be suspect of any credit card purchases where the address of the card holder does not match the shipping address. Of course, it may just be that the buyer uses a bill paying service or is traveling. In any case, always receive the card holder's authorization before shipping any products.

What to do if you are scammed

Steps to take if victimized:

  1. File a complaint with the online auction company. In order to be considered for eBay's Fraud Protection Program, you should submit an online Fraud Complaint with 90 days after the listing end-date.
  2. File a complaint with the Internet Crime Complaint Center.
  3. Contact law enforcement officials at the local and state level (your local and state police departments).
  4. Also contact law enforcement officials in the perpetrator's town & state.
  5. File a complaint with the shipper USPS, UPS, Fed-Ex, etc.
  6. File a complaint with the National Fraud Information Center
  7. File a complaint with the Better Business Bureau.
  8. Send copies of the correspondance, emails, etc. to Consumer Fraud Reporting.

Tips for buyers - Avoiding Internet Auction Frauds

Listed below are tips to protect yourself and your family from various forms of Internet fraud:

  • Determine what method of payment the seller is asking from the buyer and where he/she is asking to send payment.
  • When purchasing products over the Internet, it's best to use your credit card rather than PayPal or your debit card. That way, if you have any problems, you have recourse to dispute the charges through your credit-card company before the payment is actually made.
  • Examine the feedback on the seller.
  • Learn as much as possible about the seller, especially if the only information you have is an e-mail address. If it is a business, check the Better Business Bureau where the seller/business is located.
  • Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller's obligations are before you bid.
  • Find out what actions the web site/company takes if a problem occurs and consider insuring the transaction and shipment.
  • If a problem occurs with the auction transaction, it could be much more difficult if the seller is located outside the US because of the difference in laws.
  • Ask the seller about when delivery can be expected and if there is a problem with the merchandise is it covered by a warranty or can you exchange it.
  • Find out if shipping and delivery are included in the auction price or are additional costs so there are no unexpected costs.
  • There should be no reason to ever give out your social security number or drivers license number to the seller.

If you believe you may have fallen victim to this type of scam and wish to report it, please file a complaint with the U.S. government Internet Fraud Complaints Center.  And tell us about it, so we can warn others!

In addition, visit eBay and PayPal for additional security alerts and fraud prevention tips.

See these sample frauds to help in knowing what to look for:

  1. Romanian eBay scammers caught!
  2. Buy my puppy!
  3. eBay/Auction Listers/Sales Position/P-Time/F-time...
  4. Ebay scam
  5. Another Ebay scam
  6. Online Auction Motorcycle Scams - Robert James,
  7. Wii Game Console, Another Romanian Scammer, Ciprian Paul Bradeanu,, Romania, "You have to make the payment exactly how we agreed on via Western Union. "
  8. Mandy Coker, ashley_terpeza018, bbb
    "The payment (Check)will contain some extra money which you will help me get across to the shipper as we have arranged with a shipper to come and pick up the item"

How to Buy from Online Auctions

See this page for tips and guidelines to buy online without getting scammed

And please let us know about any suspicious calls or emails you receive.  We look for patterns so that we can alert the authorities and victims to new scams, before it is too late!




For a comprehensive list of national and international agencies to report scams, see this page.