Online Auctions: Tips to Avoid Getting Scammed on Ebay and Other Online Auctions

How to Buy Online Without Getting Scammed

Tips for Buying on Ebay and Other Sites

Internet auction - basics

  • Get to know the rules and standards set by the site - they are in place to ensure user safety. Read the safety advice provided by the on line auction site before trading. Never step outside of these or outside of the site no matter how enticing the deal. Fraudsters will try to trick you into doing this. Like any popular activity you must ensure you know the rules of the game' because 'A little knowledge is a dangerous thing'.
  • When looking at an advertised item compare pricing. Beware of people offering you a deal below the current bid or reserve price, especially if they are contacting you direct. Remember, if an offer sounds too good to be true it probably is'.
  • Get to know the seller by looking at their selling history and the goods they sale. Be extremely careful around the payment method used for persons selling with little or no selling history.
  • Don't get carried away in the excitement of winning an auction. Fraudsters rely on you being over keen and off your guard. It is never too late to ask questions of a seller to ensure that you are completely happy with what you are about to pay for. Do not follow through if you think it is a fraud, report the seller to the site.
  • Finally, if your site offers 'second chance' bidding on an auction verify that any notification of you qualifying for this 'opportunity' actually comes from the site and not from a fraudster impersonating them. You can do this by carefully checking the address from which the e-mail is sent or by contacting the site via its published website (Beware of using any hyperlinks or numbers attached to such a 'notification' as these may also be false).
  • "Always ask yourself, have I won the item, or have they won their next victim?"

Internet auction - payment

Buyer:

  • Never use Western Union, MoneyGram and other money transfers as a payment method whenever someone suggests this to you, even if it is by the seller after you have 'won' the auctioned item or when approached to step outside the on line auction site. There is little security in this, no matter what the seller says, and you are effectively sending your hard earned cash to a stranger 'on trust' alone. See our Money transfer pages for further information.
  • PayPal: Similarly, only use PayPal for small transaction: If you use PayPal to wire money to the seller, you cannot get it back. PayPal is not an escrow service. They just instantly wire the money into the seller's checking account. Once the scammer seller gets the money, the scammers close the checking account, so PayPal could not get the money back even if they wanted to.
  • Trick lines: Scam artists pretending to be legitimate sellers use a number of tricks to get potential buyers to wire them cash. A typical one is the "second chance offer" to losing bidders. The fraudster wants to "lure" the losing bidder off the auction site in an attempt to get him or her to wire funds. The scammer sends a message that claims to be from the auction site telling the buyer to wire payment. It looks real, but it's a fake.

    Other trick lines that investigators have seen to get unsuspecting buyers to wire funds:

    "Our credit card account (online payment service) is having technical difficulties."
    "We've had problems in the past with buyers who pay with online payment services."
    "We'll provide insurance for your wire transfer."
    "We'll pay the fee for the wire transfer."

     

  • Direct banking transactions: Being extremely careful around direct banking transactions to pay for goods. There is still little security in this area also, which increases if the seller has no or little trading history with the on line auction site you are using. You are still effectively still sending your hard earned cash to a stranger 'on trust' alone. There have been instances where people have sent money to bank accounts and not received the goods. This has been more prevalent when dealing with people with no or little trading history on the auction site as a seller.
  • Payment options: Successful bidders have many payment options to choose from when using Internet auction sites. Credit cards and online payment services (they often accept credit card payments) are safest. Other options include debit cards, personal checks, cashier's checks, money orders, or escrow services. Some sellers limit the types of payment they accept; many post that information on their auction listings.
    As a rule, credit cards offer buyers the best protections. Online payment services offer some protections; look for them in the terms and conditions section of their websites. High volume sellers often accept credit cards directly, but don't count on many small-scale sellers to send an item until they've received your cashier's check or money order.
  • Escrow: Use on the online payment options or a reputable ESCROW account to pay for items. ESCROW is a payment system where both buyer and seller's financial details are held separately and in isolation by a legitimate third party company acting as 'middleman'. The buyer makes their payment into the Escrow account. The payment is only made to the seller the goods have arrived and been deemed satisfactory by the buyer. By doing so your transactions will be better protected and often insured. Never enter an Escrow account site through a link in an email sent to you by anyone, as it has not been unknown for fraudsters to set up fake Escrow websites. Use a search engine to locate the website or enter your chosen Escrow site through it's proper web address. Always check the url shown in your web browser address bar. See this page for tips on how to select an escrow service.
  • Avoid dealing with sellers who end auctions early, yet continue to strike a deal with you vian email. Remember, you are now outside the protection of eBay and it's internal escrow. You should always be suspicious when a seller ends an auction early. There's no legitimate reason to.
  • If you're buying a used car, email the seller for a VIN#. If you don't hear back from him, it's a fraud. Some scammers do actually respond back with VIN#s though, probably copied from another online ad, so still be careful. Use a service like CarFaqs to check it out.
  • If the seller changes email addresses on you, stop dealing with him. He probably changed because either we, or another victim reported their previous email, and had their email account shut down. They will make up some virus excuse.

Seller:

  • When a check is accepted for payment, please be aware that although your bank or building society may after three days state that it has 'cleared', this only means that the money has passed between the banks. You remain liable if the check that you have paid into your account is forged or stolen, this may not come to light until the check is received by the other bank or the bank account holder queries a transaction on their account. This may take longer than you anticipate. The money is then taken back from you account so you lose not only the items that you have shipped to the 'Buyer' but also the money that the buyer 'paid' for the goods.
  • A common trick that fraudsters use is known as 'Criminal Cash Back' where a seller accepts a check for an amount higher than the value of the transaction, often to pay a 'shipping charge' to the buyers 'shipping agent'. This is actually paid to another fraudster who receives 'clean' money from you. You then find out at a later stage that although the check paid to you has 'cleared', it is a stolen or forged check, and you must pay the money back to your bank with no hope of getting the money back from the bogus 'shipping agent'. See out pages on Criminal Cashback pages for further information.
  • Use an escrow service for any large transactions, of amounts of money you cannot afford to use.  See this page for tips about selecting and using an escrow service.

Internet auction - account security

  • Protect your on line auction account details as you would your own bank account, whether it be your actual log in details and password to your auction account or your payment account. Do not become a victim of identity theft by revealing your name or account details. By aware of phishing emails that purport to come from the on line auction or payment site you are registered with, asking you to update your account or re-enter your details because your account has be suspended. To see two examples of a phishing emails purporting to be sent by on line auction site Ebay, click on the link to example 1 and example 2.

There are a number of factors that will indicate this is a phishing attack. In example 1 the following:

1. The email address, From: eBay Administration [admin@ebayz.com] whilst looking like a genuine one from ebay is not correct as it reads @ebayz.com instead of @ebay.com
2. Often these emails will contain links that sometimes take you to pages on the genuine website to give it an appearance of being genuine. But they also can take you to fake pages set up to represent the genuine website.
3. The link to up date your records http://cgi1.ebay.com/aw-cgi/ebayISAPI.dll?Update, whilst looking genuine will take you a fake website, in this case http://johtnanx.com.phtemp.com/eb/. Always check the url shown in your web browser bar.

  • Always enter your on line auction or payment site through it's proper web address. Save this in your favorites. Never be tempted to enter it through a link sent to you, especially in an email, as it might lead you to a fake site and disclosure of your personal information. If your on line auction or payment site provides a toolbar down load that will advise you when you are on the genuine site, consider using this.

Tips to Protect Against Non-Delivery of Merchandise

  • Make sure you are purchasing merchandise from a reputable source. As with auction fraud, check the reputation
    of the seller whenever possible, including the Better Business Bureau.
  • Try to obtain a physical address rather than merely a post office box and a phone number. Also call the seller to
    see if the number is correct and working.
  • Send them e-mail to see if they have an active e-mail address. Be cautious of sellers who use free e-mail services where a credit card wasn't required to open the account.
  • Investigate other websites regarding this person/company.
  • Do not judge a person/company by their fancy website; thoroughly check the person/company out.
  • Be cautious when responding to special offers (especially through unsolicited e-mail).
  • Be cautious when dealing with individuals/companies from outside your own country. Remember the laws of different countries might pose issues if a problem arises with your transaction.
  • Inquire about returns and warranties on all items.
  • The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong. Also, consider utilizing an escrow or alternate payment service, after conducting thorough research on the escrow service.
  • Make sure the website is secure when you electronically send your credit card numbers.
     

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.