Towards the end of 2013, gamers excitedly clamored to get their hands on the shiny new Xbox1 console. However, some who thought they’d found bargain deals courtesy of web auction sites such as eBay were in for a nasty shock. Rather than a lovely new console, they got a picture, of a box.
This was the most high profile example yet of one of the fast growing types of internet scam – auction fraud. According to Scambusters, it accounts for around 48% of all fraud taking place over the web.
Auction fraud’s popularity lies in its simplicity, coupled with the difficulty involved in tracing culprits. In its simplest form it involves advertising a product for sale which never arrives. The seller waits until the unwitting buyer has transmitted the funds before shutting down the advert and absconding with the cash.
However, it comes in many different guises:
The hoax buyer: Sellers can become the target of buyers looking for cheap goods. A buyer makes a bid on a product, but finds a way to avoid paying the money until the product has been sent. This can be done by sending cheques which bounce or creating a false escrow into which the money is deposited. This creates the illusion of legitimacy and persuades the seller to dispatch the product. When that happens, the fake escrow magically vanishes into thin air.
Shilling: In April 2010, Paul Barret became the first person to be convicted for a practice known as shilling. He had been placing bids on a product he was selling in order to push up the price.
Misrepresentation: Suggesting the item is in better condition than it is. The buyer only discovers the awful truth when it’s too late to do anything about it.
Killing the auction: A bidder can stop an auction by offering an inflated bid which removes the item from sale. This clears the way for them and, once they come to collect, they think of a reason why they can drive down the price.
So, how do you stop yourself becoming a victim?
Clues are things such as bids which are only slightly higher than yours. This is intended to nudge you up a bit and inflate the price. Look at the price of other similar items – if it starts creeping above that then you should bail out. If an item is immediately re-listed then it is a sign that the phoney bidder won.
Aside from this you should exercise caution when looking at a deal. Make sure there is a commitment to refund money and return the product if it is not satisfactory. Find out more about the location in which the bidder is based. If the bidder comes from a different location from the item, then it’s a sign that it might not be a genuine bid.
Be careful if you see a bid which appears to be too good to be true. An extremely high bid might be designed to frighten others away. Ask yourself why this person would make such a high bid?
Finally, look at the auction site itself. While a legitimate site such as eBay can still not offer a guarantee of safety they do at least provide a reassurance that most sellers are legitimate, and you’ll have recourse by reporting a seller to eBay.
Sadly, as long as the internet lives, auction fraud will continue to grow. However, if you follow these rules, you can at least give yourself a bit of protection.
Image Credit: Brian Turner