E-auction fraud is a growing epidemic worldwide, as online shopping has grown significantly every year that online shopping has been available.Most e-auction fraud cases involve straightforward scams where consumers allegedly win merchandise by being the highest bidder. All sounds good until they send the payment and never receive the merchandise.Sometimes auction fraud cases involve slick descriptions that are presented and worded in a way that most people would miss important details.
Types of e-auction frauds:-
1. Bid shielding is the practice of placing a low bid in an auction online and having a second person enter a bid that is high enough to get other bidders to drop out or not even bid. Then at the last second, the high bid is retracted and the low bid wins.
2. Misleading descriptions where sometimes descriptions include too much flowery language or omit important details.
3. A fake photo is where almost every listing has a picture of the item with it. Dishonest sellers will put up a misleading photo or even a photo of a different item.
It is important for users to know how to protect themselves from these frauds. The followings are several steps in protecting yourself against e-auction fraud:
1. Feedback forum
It set up a forum to allow the buyers and sellers to build up their online trading reputations. It also provides users with the ability to comment on their experiences with others. All the information and history of any sellers could be acquired through the forum. Review the feedback rating for the seller, and use common sense; if the seller has a history of negative feedback, then the participants do not bid with the particular seller.
It is important for users to know how to protect themselves from these frauds. The followings are several steps in protecting yourself against e-auction fraud:
1. Feedback forum
It set up a forum to allow the buyers and sellers to build up their online trading reputations. It also provides users with the ability to comment on their experiences with others. All the information and history of any sellers could be acquired through the forum. Review the feedback rating for the seller, and use common sense; if the seller has a history of negative feedback, then the participants do not bid with the particular seller.
2. Escrow Service
Is a licensed and regulated company acted as an independent third party. Buyer mails the payment to escrow services which verifies the payment and alerts the seller when everything checks out.
Is a licensed and regulated company acted as an independent third party. Buyer mails the payment to escrow services which verifies the payment and alerts the seller when everything checks out.
3. User Verification System
Higher level of verification can be qualify by asked the bidders to offering their IC number, driver’s license number and also date of birth. The voluntary programs encourage users to supply information for online verification.
4. Authentication Service
It is to determine whether an item is genuine and described appropriately. It also very difficult to perform because of their training and experience, experts can detect counterfeits based on subtle detail.
5. Grading services
Is a way to determine the physical condition of an item, such as ‘poor quality’ or ‘mint condition’. Different item have different grading systems. For example, trading cards are graded from A1 to F1, whereas coins are graded from poor to perfect uncirculated.
6. Nonpayment Punishment
To help protect sellers, 1st time nonpayment results in a friendly warning. A sterner warning is issued for a 2nd time offence, a 30 days suspension for a 3rd offence, and indefinite suspension for a 4th offence.
7. Appraisal services
Use a variety of methods to appraise items. It includes expert assessment of authenticity and condition, and reviewing what comparable items have sold for in the marketplace in recent months. An appraised value is usually accurate at the time of appraisal but may change over time as an item becomes more or less popular in the marketplace.
8. Item verification
Is a way of confirm the identity and evaluate the condition of an item. Third parties will evaluate and identify an item through a variety of means. For example, some collectors have their item “DNA tagged” for identification purpose. It provides a way of tracking an item if it charges ownership in future.
9. Physical inspection
It can eliminate many problems especially for collectors’ item. When the seller and buyer are in the same vicinity, it is easy to arrange for such inspections. Ebay offers inspection services on a regional basis, so buyers can arrange for nearby inspections.
10. Insurance policy
eBay offers insurance underwritten by Lloyd's of London. Users are covered up to $ 200, with a $25 deductible. The program is provided at no cost to eBay users. Supplementary insurance is available from companies such as AuctionInsurance.com. At other auction sites, such as Amazon.com/ auction, some insurance is provided, but extra insurance may be added.
Use a variety of methods to appraise items. It includes expert assessment of authenticity and condition, and reviewing what comparable items have sold for in the marketplace in recent months. An appraised value is usually accurate at the time of appraisal but may change over time as an item becomes more or less popular in the marketplace.
8. Item verification
Is a way of confirm the identity and evaluate the condition of an item. Third parties will evaluate and identify an item through a variety of means. For example, some collectors have their item “DNA tagged” for identification purpose. It provides a way of tracking an item if it charges ownership in future.
9. Physical inspection
It can eliminate many problems especially for collectors’ item. When the seller and buyer are in the same vicinity, it is easy to arrange for such inspections. Ebay offers inspection services on a regional basis, so buyers can arrange for nearby inspections.
10. Insurance policy
eBay offers insurance underwritten by Lloyd's of London. Users are covered up to $ 200, with a $25 deductible. The program is provided at no cost to eBay users. Supplementary insurance is available from companies such as AuctionInsurance.com. At other auction sites, such as Amazon.com/ auction, some insurance is provided, but extra insurance may be added.
Tips for Buyers
1. Identify the seller and check the seller’s feedback rating.
2. Do your homework. Be sure you understand what you’re bidding on, its relative value and all terms and conditions of the sale, including the seller’s return policies and who pays for shipping.
3. Establish your top price and stick to it.
Related article
How to prevent e-auction fraud
http://www.crimcheck.com/background-check-news/whats-internet-auction-fraud-and-how-do-i-prevent-it
How to avoid online auction fraud
http://www.usatoday.com/tech/columnist/2002/05/07/yaukey.htm
A warning to auction sites – Pareto is dead
http://leapingcat.wordpress.com/2008/05/10/a-warning-to-auction-sites-pareto-is-dead/
http://www.crimcheck.com/background-check-news/whats-internet-auction-fraud-and-how-do-i-prevent-it
How to avoid online auction fraud
http://www.usatoday.com/tech/columnist/2002/05/07/yaukey.htm
A warning to auction sites – Pareto is dead
http://leapingcat.wordpress.com/2008/05/10/a-warning-to-auction-sites-pareto-is-dead/
