Don’t be fooled by online auctions

You can literally find almost anything for sale somewhere in an online auction. But, since most sellers are individuals and this is not a face-to-face transaction, there is a chance of being scammed.

The first thing you should do is familiarize yourself with the auction site’s rules and procedures. Many online auction houses allow users to list what they want to sell without checking to see if the seller actually has these items in their possession. They may not guarantee that the seller will keep his word on the terms of the deal. There may be hidden fees for the seller or the buyer. After the auction ends is not the time to find out these things.

Now that you know how the auction site works, let’s be on the lookout for scammers. Yes, scammers have their sights set on auction buyers and sellers, too. Their main objective is to get money for nothing or goods for nothing. You can prevent them from succeeding in their objectives against you.

As a buyer, there are several ways to get scammed:

Without being able to physically verify the item because it is typically sold from many miles away, it is difficult to know if the item is accurately described.

Always pay attention to shipping and handling costs. Many less than legitimate sellers price things incredibly low to lure bidders in and then hit them with an extremely high shipping and handling fee. If the fee was listed in the auction notice and you were the winning bidder, most auction houses say you are responsible for that fee.

Many auction sites (including the most popular Ebay) have feedback systems so buyers can report how the transaction went. Whether it was shipped on time, whether it was what was described in the auction, and whether it was well packaged are all things you can report by providing feedback to the other party you completed a deal with. By checking a seller’s feedback, you gain insight into how they have done business in the past.

Be careful when dealing with sellers from foreign countries. There is little to no recourse if one were “ripped off” by someone from a foreign country.

Beware of fraudulent offers. Bidding rigging is when the seller himself or an associate deliberately bids for his own items and against a buyer in an effort to raise the price. Many auction houses have built-in security measures to detect complicit bidders, but they are still a possibility.

When dealing with name brand items, especially clothing and media (dvds, cd-roms, etc.), be on the lookout for counterfeits. Many of the major fashion companies have had replicas of their products made illegally abroad and then brought in illegally. A very good use of the phrase “if it seems too good to be true, it probably is”. With the relative ease of copying movies and music and burning them onto your own CDs and DVDs, it’s quite possible that the movie you’ve found is a pirated edition.

When buying through an auction site, it’s usually best to pay with a credit card, as this will give you a chance to come back a year later and dispute a charge.

For expensive purchases, many sites may provide or recommend an escrow service so that the money you’re paying the seller isn’t available to the seller until you’ve confirmed that you have the item you purchased in your possession.

There are also many ways to scam a seller.

Please be careful when dealing with overseas customers who use paypal or credit cards. Paypal and credit cards are effective to use when shopping online. When selling to a foreign buyer, you may not have a confirmable address or a reliable service that can track a package shipped to a foreign country. The buyer can then claim that he has not received the package even though he has actually delivered it. The buyer then files a claim with the credit card company and they reverse the charges, getting the money back from the seller even though they may have received the item.

A buyer can contact a seller and ask him to send the package to a different address than the one indicated for the buyer. It may be a present or gift for someone else or the buyer may be traveling. The potential problem here lies in the fact that some auction or payment sites (and Paypal is one of them) will not offer protection on your package unless it is shipped to the address on file. If it is sent to a different address and the buyer claims not to receive it, the money will be refunded there.

When selling online and receiving a check in the mail, remember to wait long enough for the check to clear before submitting your purchase. A buyer can request “as soon as possible” shipment of a package and pay by check. If the merchandise is shipped before the NSF check comes to the attention of anyone on the seller’s side, you may have run out of the item sold, as well as the amount of money it was sold for.

One of the most popular auction scams right now occurs when a buyer (usually from a foreign country) wins an auction, then contacts the seller offering to transfer or send funds immediately. The only problem, the buyer will say, is that the item is $100 (for example) and you only have a check or money order prepaid for an amount greater than the purchase price. The buyer then asks the seller to send not only the won item, but also the change for the money order or check that is larger than necessary. After the seller ships the won item and returns the difference in price, you are warned that the money order or check is forged or counterfeit. The seller loses both the money for the item and the item itself.

When selling a package that is paid for by credit card or paypal, make sure it is shipped in a way that requires the buyer to sign for the package (Certified Mail, Delivery Confirmation, etc.), this will help if the buyer later disputes that received the package.

By paying attention to detail and being vigilant, you can avoid being scammed online.