Ebay Auction Fraud
| An internet auction site such as eBay is like a pulsating global market place that is open 24/7. Internet auction sites offer online retailers a worldwide storefront from which to market their goods and they offer buyers virtual flea markets that are filled with a smorgasbord of new as well as used merchandise from right around the world. |
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| EBay’s presence on the internet is so pervasive; it is almost synonymous with online shopping. Expectedly the easier eBay makes it to buy and sell items through their site; the easier it is for con-artists to take advantage of the system. |
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How Internet Auctions Work
| Auction Site as Moderator - In most cases the internet auction site is only the common meeting place for buyers and sellers; it takes no responsibility for any business transaction between the two parties. The merchandise is with the seller, not the site; and the seller, whether an individual or a business, sells their items directly to the buyer. |
| Registration & Fees - Buyers and sellers who wish to use the internet auction site have to register and acquire a screen name and password prior to engaging in any transaction. |
| The Auction - Sellers typically set a lowest price for the item and a time limit on bidding. Bidding is closed at the scheduled time and the merchandise is sold to the highest bidder. |
| Post Auction & Delivery of Goods - The seller and the buyer correspond by e-mail and decide upon a mode of delivery that suits both parties. |
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Online Auction Fraud
| While online auction fraud has been rampant from the time eBay online auctions were launched, a couple of high-profile incidences brought the whole internet scam out of the closet and splayed it across the internet headlines. |
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| Among the numerous complaints received by the Federal Trade Commission (FTC) annually, online auction fraud has consistently ranked amongst the top few. It’s not only the buyers who complaint about being cheated, but sellers too can find themselves becoming victims of online auction fraud. |
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| Some of the common complaints made by buyers regarding online auction frauds include: |
- Shipment of merchandise that was of inferior quality to that advertised
- Delay in dispatch of the merchandise
- Failure to dispatch shipment altogether
- Failure to divulge pertinent information about the goods being sold
- Failure to disclose pertinent information about terms of sale
- Shill bidding, where deceitful sellers bid on their on their own items in an attempt to drive up the cost
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| Common complaints by sellers include: |
- Bid siphoning, where fraudulent dealers offer potential bidders better deals and lure them away from legitimate auction sites
- Bid shielding, when deceitful buyers place very high bids and then retract them, indirectly sending out a message that the merchandise is available at lower price
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What is being done to curb online auction fraud?
| Not willing to sit back and be silent victims to online auction fraud, a few buyers who got conned on eBay have set up special online vigilante groups and web sites for collecting transaction information from victims. |
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| These auction fraud vigilante groups have become a force to reckon with. Their coordinated efforts in contacting law enforcement officials have generated a powerful anti-fraud movement that is hard to ignore. Their voices can be heard out loud and clear across the World Wide Web and rogue dealers could find themselves immediately NARUed (Not a Registered User) from online auction sites for contravention of any sale agreement- an interesting term coined by eBay, which alludes to accounts that have been suspended for reasons of fraud. |
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