Lots of other online auction businesses, though much smaller, have been edging into the market for a few years. Bonanzle.com bills itself as the eBay alternative. eCRATER.com allows sellers to create a free online store. CQout.com says it’s been drawing buyers and sellers from 80 countries since 1999. Then there are blujay.com and atomicmall.com.
“We encourage consumers to ... do a little research,” said Breyault of the Fraud Center. NCL, which says it’s the nation’s oldest consumer group, created the Fraud Center in 1996 to give consumers advice about Internet shenanigans. Its website logs complaints and shares the information with more than 90 local, state, federal and international law enforcement agencies
Generally, Internet crime complaints are on the rise and fraud is costing consumers more, according to the Internet Crime Complaint Center (IC3), a partnership among the FBI, the National White Collar Crime Center and the Bureau of Justice Assistance.
In 2009, the IC3 received 336,655 complaints, a 22 percent increase from the year before. The total dollar loss from those cases was $560 million, more than double the $265 million the year before. Ranked by number of complaints, auction fraud was fourth, behind non-delivered merchandise, identity theft and credit card fraud.
In Georgia, according to IC3’s numbers, auction fraud has been the top or second ranked complaint since 2005.
At the Federal Trade Commission, which also tracks thousands of consumer fraud complaints every year, online auction fraud consistently ranks in the top six or seven. Last year, the FTC took 57,821 complaints about auction fraud.
The grievances generally deal with late shipments, no shipments, or shipments of products that aren’t the same quality as advertised; bogus online payment or escrow services; and fraudulent dealers who lure bidders from legitimate auction sites with seemingly better deals. Most complaints involve sellers, but in some cases, the buyers are the subject.
Here’s a primer, from eBay and some of the federal consumer sites, on a few underhanded auction tactics:
● Bid siphoning. Con artists lure bidders off legitimate sites by offering to sell the same item at a lower price. But, you may forgo protections like insurance, feedback and guarantees.
● Bid shielding. Buyers submit a very high bid to discourage competition, then retract the bid to allow friends to bid at a lower price.
● Shill or phantom bidding. A seller might have multiple accounts or a group of friends who artificially raise bids to maximize profit on an item. The practice is illegal.
● Switch and return. A buyer returns a purchase, but instead of sending the original item, sends a fake.
One way to get help is to file a complaint with the Better Business Bureau, said Fred T. Elsberry, spokesman for the BBB for metro Atlanta, Athens and North Georgia. The agency forwards all complaints to the FTC so the trade commission can keep track of trends, but works locally and individually on solutions.
“Our focus is on trying to get a resolution between the consumer and the business,” Elsberry said.
As for the auction houses, like eBay, “they are aggressive as anybody in terms of trying to catch these people or put other processes in to try to keep that fraud from happening,” Elsberry said.
In the last three years, 2,751 consumers have lodged BBB complaints about eBay, which has an A rating.
The company’s recently created buyer protection program offers consumers a money-back guarantee if an item isn’t received or isn’t as described. But some purchases aren’t covered, such as cars, digital music and real estate, so read the fine print.
Helpful hints for online bidding
Here are a few tips for how to safely navigate the world of cyber auctions:
- Research. Check the seller's feedback and ratings from multiple sources. Verify contact information. With eBay, place a low bid on an item and then get contact information at bit.ly/ahbU7M. Call the phone number to verify and check the address through an online directory such as www.free411.com.
- Check the seller at complaint sites like Complaints Board, RipoffReport and planetfeedback. Be aware, however, some of these sites are a kind of free-for-all of grievances.
- Always pay with a credit card, even with PayPal. Credit card companies will refund money if the seller fails to provide merchandise. Avoid wire transfers. Scammers can use them to hide their identity, especially if they are outside the U.S.
- Do not accept a check as payment. Some overseas cons send an excessive payment via a fake foreign cashier's check. Then, they request the excess money returned via wire transfer.
- Always make and keep copies of the item's description and posted photographs.
- Be wary of fake auction and payment sites. Before clicking on any hot link, verify like this: Place your cursor over the link; the link should match the URL that will appear at the bottom of your screen.
- Also, if there is no "s" in the "https:" web address, the link is not a secure site. DO NOT provide personal information there. This is how scammers access passwords, credit cards, and other personal information.
- Look for red flags: auctions that hide the bidders, list products in the wrong categories or list products in a different location than the seller.
- Ignore pop-ups or e-mails that request personal information. Make sure your computer is protected by updated anti-virus and fire wall software.
- If you're shipping something, consider paying the extra money to get a tracking number so the Postal Service can locate your item if it's lost or stolen.
Sources: eBay, Better Business Bureau, and National Consumers League’s Fraud Center
Check our sources
Quick Facts about Internet Auctions from OnGuard Online:
The Fraud Center, a project of the nonprofit National Consumers League:
eBay’s Buyer Protection Program. Make sure to read the exclusions:
The Internet Crime Complaint Center, a partnership among the FBI, the National White Collar Crime Center and the Bureau of Justice Assistance:
2009 Internet Crime Annual Report:
Better Business Bureau’s complaint form: