The buyer fails to pay the seller for the goods received. This can be accomplished through a bad or bounding check, a bogus or fake money order, a counterfeit certified check, stolen credit card, simply not paying or a number of other techniques.
Be wary of buyers who demand you send the merchandise immediately. They may want to get their merchandise before the bank discovers that they used a stolen credit card. Sellers should try to accept smart payments like credit card or an escrow service, which covers the seller in the case of fraud. Do not mail items to PO boxes, suites, or drawers. Make it a policy to send merchandise to a physical address.
Do not let the bidder change addresses at the last minute. A thief will not want want the actual cardholder to get the merchandise. Send the merchandise to the address that is on the credit card and use a Cash On Delivery service where possible.
Do not ship the goods until the cheque, money order etc has been cleared by the bank
Inform the buyer at each stage of the process. If you are waiting for the cheque to clear and the banks says it will take up to 3 weeks, tell the buyer. Better still send them a copy of the statement from the bank.
The buyer uses bogus IDs from phony accounts, or uses co-conspirators, to place multiple bids on an item to inflate the selling price to scare off competitors. The schemers will pull out the high bids at the last minute and the actual buyer then enjoys a low bid win and gets the item at a much lower price than he would have otherwise. Sometimes juveniles or online anarchists do this for personal amusement with no personal gain.
Review the IDs of the last minute bid-withdrawals. Research those IDs against other auctions where they may have done the same thing. A seller is under no obligation to accept a bid. If you uncover a common theme with these IDs, notify the auction site immediately.
Here the winning bidder swaps the item sent by the seller for an identical item that has been damaged or in a poor condition, and then send it back with a complaint.
Take excellent photos of your item before you ship. Take note of any nicks or scrapes and mark the item if you can. For stuffed animals or clothing, you could sew a small coloured knot in the seam and photograph that. For other items, you could take a pen with ink that shows up under black light and put a small dot on the bottom. I don't recommend doing this for photos or collectors items, like trading cards.This method doesn’t prove that you’ve been duped, but in small claims court it is a preponderance of evidence that counts. Do not damage the item when you mark it and do not ruin the guaranteed condition.
These are not always fraudulent, because things do get lost and broken in transit. Often these claims are a result of the buy and switch technique above, or careless handling by the buyer. Be wary of bidders who claim it was so damaged they discarded the item and demand their money back.
If an item is sent insured or certified, it can be traced. The recipient must sign the certified letter and an insured item will be covered if it is lost or damaged. A bidder who does not want to fork over a couple of extra dollars for insurance should be informed in writing that they will be liable. Keep this correspondence for your own protection.
This is one of the oldest tricks in the business, where the merchandise is not as described. Value, authenticity or condition may be overstated. A seller may intentionally misrepresent the item in the written description or by using a glossy marketing photo, likewise blurry, or strategically blocked photos can hide flaws. The item in the picture may look fantastic, whilst the real deal may be a disappointment.
Ask questions. The write-up and photo should be enough to give the potential bidder a clear picture of the actual item. Do not let the seller be evasive or distract you with descriptions like "one of a kind.” Ask them where they got the item, where they got it appraised, how they verified its value, how old the item is, etc. If they avoid answering, move on. If you have received something that is not what was described, notify the seller immediately. Inform the seller that you did not get what was described and ask for your money back. Stay cool and do not be accusatory. If the seller refuses, then report them to the auction site and state the facts in that seller's feedback.
Basically the seller takes your money and runs. The seller posts an auction usually, but not necessarily under a bogus ID with the intention of receiving money from sellers and giving nothing in return. The seller sends notice to usually several bidders that they have won, and directs them to send money right away. The bidders receive nothing.
Do not buy from sellers who only take cash. Favour auctions that take credit cards, checks, or third party payments. like i-escrow, Tradesafe or Paypal. An escrow service holds the bidder’s payment until the bidder receives the merchandise. Then the payment is released to the seller. These services charge a small fee. Checking the seller feedback will certainly help ally your fears.
A seller uses bogus IDs, or co-conspirators, to place additional bids on their own auction item in order to drive up the bid price.
Review the bid history for last minute bids from multiple IDs. or the same ID multiple times. Then compare these IDs to the seller's last auction. If they match, you may have uncovered shilling. Report your concern to the auction site and avoid that seller's auctions in the future.
The seller represents a reproduction as the real thing, the seller may not know the item is not original.
Before you purchase a piece of art, do some research. Find out how much a piece should cost and what the likelihood is of an original being available at the seller's asking price. Since authentication is difficult, it will be up to you to know your items. Ask the seller where he or she got the item, the background or provenance of the item, and how long the seller has had it. Keep a copy of all responses. Avoid auctions where all sales are final.
The seller uses the online auction as an avenue to sell stolen goods. When the police catch on to the thief's activities, they look for the stolen goods and trace them to the buyers. Receiving stolen goods is a crime. Do not get involved.
Watch for remarks such as these:
I have easy access to any model of this item.
I work at ***** and can get as many as you want.
I stole (or any similar word such as acquired) this and can let it go cheap.
There is always a reason why an item sells sharply below cost.
This can be simplified as the "too good to be true" scheme. The seller sells bootlegged music CD's, videos, and computer programs very much below market price. These items are advertised as the "real deal" but when you get your copy of the programme, you find it comes without the box, instructions or warranty. Thanks to the advent of CD recorders, this scheme is becoming too common.
Beware of anything that is too good to be true. Read the auction description carefully and ask questions. Avoid vague descriptions. Ask if the item comes with the original box. Ask how the seller obtained the software. Do they still have a receipt? Watch out for sneaky phrases like "backup" and "archive.” Be especially cautious when buying through Dutch Auctions. Not all are frauds though because multiple quantities of an item may have come from liquidation, so use common sense.
In this scheme, the seller auctions an item and offers to send you the item (usually a new brand name item) on approval. If the bidder likes the item, he can send the money by Western Union, if not, the item can be sent back without paying with no questions asked. How fair and how safe can you get? The bidder happily agrees.
Do not buy from a seller who only takes cash. If it is too good to be true, it probably is. The seller will be in a rush to get the cash and may ask that you send it Western Union, with no ID required.
Fees, usually related to shipping costs, are added to the cost after the sale has been made. Most reputable sellers will state shipping and handling cost in the advert, so if they are missing ask the seller for an estimate of cost.
Ask the seller what all the costs are before the auction begins. Save or print a copy of the response. If you fail to do this and the seller tacks on additional fees, research what the actual costs should be then ask that the seller stick to actual costs.
The sole purpose of the auction is to obtain names, money, or credit card numbers from unwary buyers. There is no merchandise; the seller only wants to steal your identity.
If your credit card number is stolen you can easily replace it. Credit card companies will make a small charge and, in some cases, the credit card companies have waived this charge. Nothing is more important than your identity. Never give out your personal identification, such as social security number or driver's license number.
A lot of people use online auctions as a source of collectibles or antiques. In these areas it is just as easy for people to defraud themselves through inexperience as it is for a seller to defraud them. What Can You Do to Protect Yourself?
Research the auction site. Is there a protection service? Do they offer insurance, guarantees, escrow, or verified identity through a third party? Know the rules and expectations before selling or bidding.
Research the desired item. Know the value of the item that is up for bid and review the terms of the sale.
Avoid buying unseen merchandise when “all sales are final.” Ask about return policies and warranties. Get this information in writing, in case you need the small claims court to recover your money.
Be skeptical of claims about collectibles. Use caution when you come across auctions that are vague in description of the item, but lavish in flash with statements like, “one of a kind,” “won’t last long!” Glitz is a suspicious substitute for important information. such as the item’s manufacturer, size, colour, age, condition, and history. Ask for a detailed description of the item in writing, and walk away from the auction, if the seller’s response is vague.
Get a clear picture. Do not accept fuzzy photos or even fancy marketing photos or ads from the manufacturer as an indication of the item’s condition. Ask about condition, age, and where the item was purchased. Avoid the auction if the seller is non-responsive.
Make sure you understand the waiting period and method of delivery up front and insist that the shipment is insured. Let the seller know if the cost is unreasonable.
Check the seller’s feedback and ask for referrals to other happy customers. Avoid a seller with negative feedback.
If the seller is a business, and not a private individual, you may want to check them out at a consumer protection agency or the Better Business Bureau. Understand that most consumer protection laws, and the government agencies that enforce them, do not address private sales. It could be difficult to resolve problems.
Know the other party. Make sure you get a phone number and a physical address, not a PO box. Try the phone number to make sure it is valid before completing the transaction. Never rely on e-mail as your sole source of communication. A valid physical address and phone number will be vital in tracking down the seller if you are scammed. Avoid any seller who is unwilling to provide these.
Make sure that you communicate expectations in detail. Let the seller understand that you expect concise communication is return. Most fraud complaints turn out to be miscommunication between the buyer and seller.
Be wary of sellers or buyers who use free, anonymous e-mail services such as Hotmail.com, Yahoo.com, etc. It is too easy for fraudsters to use these addresses as fake IDs. It is just good business to know who you are dealing with.
Never provide personal information about yourself, such as social security number or driver’s license number. There is always the possibility that an auction could be set up for the purpose of stealing identities and credit card numbers.
Look out for buyers who seem in a hurry. Fraudsters are anxious to use stolen credit cards before they have been reported stolen. They may even offer a higher price if you will sell the item to them before the auction ends.
Do not pay in cash, ever. Cash leaves no trail for the authorities to follow. A request for cash is a clear sign of fraud. Choose a safe payment method like a credit card. If the seller has no merchant ID and cannot take credit cards, or insists on a money order or cashier’s check, then use an online escrow service. The service’s small fee is a pittance compared to the peace of mind you receive in return. You could arrange COD (cash on delivery), preferably by check made out to the seller, not the post office.That way you can stop payment if necessary.
Document all communication with the buyer or seller. Retain all pertinent documents, such as cancelled checks, phone bills, faxes, credit card receipts and statements, receipts and certifications of authenticity. Print out or save to disk all e-mails. This information will be important in pursuing prosecution or a civil remedy in the case of fraud.
Beware of sellers who try to contact you to conduct a private deal. You will lose any protection the auction site may provide.
Ship the merchandise to the address listed on the credit card. Fraudsters who steal credit cards want the merchandise to go to them, so they usually change the address with the seller after the transaction is approved. They usually use the ruse that the item is a gift and they want to change to the address of the recipient of the gift.
Do not accept multiple payments. A buyer may want to pay ten payments of $150 rather than a $1,500 lump sum. Users of stolen credit cards do this to avoid alerting the credit card company with a large charge.
Checking the feedback of the seller is a good place to start, but not all buyers leave feedback. The amount of feedback is not so important, so concentrate on the negative feedback. Whilst people do not always use the feedback system when things go right, you can be sure they will not forget to leave negative feedback when things go wrong.
If you are really concerned, consider using an escrow service. There is a price of course, but it may be worth it.
Read descriptions carefully. Look for "trade words," or phrases that give you a clue that the merchandise is not what it appears to the uninformed bidder. If a ring is sold with the description "2 ct diamond simulant," do not bid unless you know what "simulant" means. (It means basically "anything that looks like a diamond.") If there is anything in an item description that does not make sense to you, or that just makes you wonder, do not brush it off. That is almost always a valid warning sign. Ask the seller and do not buy unless you are sure of the answer.
Read descriptions especially carefully when the title includes a lot of capital letters and exclamation points. Frequently these sellers are using hype and lots of adjectives to make an item look like a better deal than it is. Do not discount these immediately, as some sellers are just enthusiastic about their goods. The prices in those cases are usually way out of line, but you can occasionally find a few good deals in these types of listings.
Watch for valid, but misleading, quotes. If someone quotes a price based on a guide, make sure you know what year the quote is from, and whether it is a retail or wholesale price. Several sellers on eBay list certain uncut trading card sheets as "Listed at $99 in the 1990 (or '91 or '92) price guide!" That is true. And many people assume that collectibles increase in price every year. That's NOT true. The early 90's were boom times for certain comic and fantasy art-related collectables. Speculators drove prices through the roof. They have since come back down to rational levels that relate to their scarcity and the demand for the items. Do not take quotes, even verifiable ones, as indicators of the real value of an item. Know the current value, and decide for yourself what the item is worth. Remember, you are the market.
Know something about what you're bidding on, or get help from someone who does. This is especially important when buying anything on which you expect to make a profit/investment return.
It is not unusual to see someone misunderstand completely accurate descriptions and bid far beyond the actual value of an item. In these cases, it is not the seller who is at fault.
Make sure the pictures are clear, and they are in scale. The best descriptions have pictures showing the product from multiple angles, and fully describe the condition of the item. If the picture is unclear, check the guarantee and the seller's feedback rating.
If you have been scammed, what can you do? There are many things, depending on the scheme. But first, take a deep breath and do not panic. Not receiving payment or merchandise is a federal crime under postal laws. The crime is mail fraud. There are a number of different agencies that you can contact, if you have been ripped off. There are some things you can do to get reimbursed for your loss as well. But there are some things that you have to do first.
Go through your file with objective eyes to check that it will be easily understood
Write a statement, beforehand, so that when you present the complaint to the authorities, or file a complaint in the small claims court, your thoughts will be organized. If you really want to make an impact, pull together an e-posse and hit the fraudster where it hurts. For example, in the case you sent money and got nothing in return, contact others who may have been duped by the same fraudster. One San Diego con duped 300 people for $150,000, while the one individual who made the complaint lost only $95. Your molehill could quickly change into a mountain that quickly grabs the attention of the authorities. Not all scams are ones that would or should be reported to the authorities. All of them should be reported to the auction site.
Stay professional when posting negative feedback about a seller. There is no need to make personal attacks. Stick to the issue at hand and only give the facts.
You can contact the Postal Inspection Service. Once you file a complaint letter with them you will receive a letter of intent to investigate.
Notify the local or national Trade Commission because most of them investigates instances of online fraud.
The fastest way to get relief is to call your local police department as well as the one in the other party's town.
You can also file a complaint with your legal authority.
Contact the seller’s Internet Service Provider to let them know you have filed charges. Want your money back? File in the small claims court and include the filing fees in your complaint. The cost to file is minimal, usually between $15 and $50. This can be done even if you have filed criminal charges. If the loss is significant, consider using a collection agency. It is always better to take preventative measures rather than have to go through the drudgery of recovering your losses.
Fraudsters should note that law enforcement agencies have made huge advances in addressing crimes committed using the Internet.