Be Careful When Bidding on the Web! Online Auction Fraud Tops Consumer Internet Complaints

1. Learn how each online auction site works.
   No two online auction sites are exactly the same. Just because you've had a great experience, say on e-Bay or Amazon, don't expect the hundreds of other sites to work just like these big boys. So check out how the individual site works. Read the site and sales rules. Take the site's tutorial, if they offer one. Find out if the site provides any buyer protections such as free insurance or guarantees for items that aren't delivered or aren't as advertised. Lots of sites make no effort to verify that the merchandise exists and is what the seller claims or to offer any other protection to buyers.
2. Before you bid, check out the seller-starting with the site's feedback forum.
   Feedback forums offer comments and/or ratings from other people who've used the site and specific seller. If a seller has overwhelmingly negative comments, you may wish to stop right there. If the feedback looks positive and you don't suspect the presence of "shill" testimonials (false testimonials posted by seller's friends), then check further. Get the seller's telephone number so you can confirm merchandise and know you have another way to contact seller. The National Consumers League also recommends that you don't do business with any seller who won't give you such contact information as name, physical street address, email address and phone number. Remember, too, that while business sales may be subject to consumer protection laws, most sales from private sellers in most states are not subject to such laws. Other experts caution not to do business with any seller whose only physical address is a P.O. Box.
3. Know your stuff—the stuff you want to buy that is.
   "Know the product" cautions the FTC. If you are not familiar with the type product, learn all you can about it from other resources—don't just depend on the seller's photo. If you think products that are readily available retail (such as computers, DVD players, cameras, electronics, etc) are a great price, do a price comparison with online established retail stores or price-trading online sites. Be sure to read the fine print; make sure you understand what all the words mean. For instance, a stereo being touted as "like new" when the small type indicates that it's "refurbished" or even "discontinued" or "off-brand" might cue you to dig further.
   
   Also if you are interested in buying in a field with which you are not familiar, make sure you know what the field's "jargon" means and what current prices are. A ScamBusters.com article shares the example of an offer of "2000 carats of Emerald Rough for $20." Wow, you think, 2000 carats is almost a pound—what a price! Visions of green rocks float in your head. But wait, "emerald rough" is not the same as "rough emeralds." Instead emerald rough is the actual rock matrix in which emerald crystals may be found, and in 2001 the $20 price was pretty average for a hobbyist looking for raw materials that might yield a few probably low-grade crystals. In another example, a playing card collector might advertise just the NFL card you're looking for and list a price from the 1991 guide. Oh boy, you think, I'll get this card for what it cost twelve years ago—what a deal. Caution: values of many collectibles go down not up. (Remember Beanie Babies?)
4. Don't forget the cost of shipping and insurance.
   Will your bid still be a deal after you add shipping and insurance costs to the buying price? Find out what those costs will be before you bid. Also look out for other "add-on" fees that some sellers and sites may add.
5. Pay by the safest way—usually credit card if possible.
   A buyer who pays the seller directly by credit card can dispute the charges if the item never comes or isn't what the seller represented. If the purchase is small (under $250) and the auction site offers insurance (with only a modest deductible) or other guarantee, you may wish to pay by money order. I recommend that you never give a private seller a personal check.
   
   If the seller accepts escrow payment, for a small fee (usually a percentage of the purchase price) an escrow company takes and holds your payment until you receive the item and verify that all is as it should be. The main problem with escrow services is finding a reliable one. The NCL's Internet Fraud Watch reports that fraudulent escrow services are also growing in number. Their "Tips for Choosing and Using Online Escrow Services" can help you find a reliable one.
6. Protect your personal information.
   No online auction seller ever has any need for your Social Security number, driver's license number, bank account number, etc. Any request for these or other such personal information should set off alarm bells‚at best, your money could be at risk, and at worst, you could be a victim of Identity Theft. Some auction sites may use a reputable third party payment system, such as Pay Pal, which offers the option of using account numbers over secure servers. Even with these, using a credit card is the recommended option. Check out third-party payment services allied with sites just as you would escrow services.
7. Keep a total record of everything about the transaction.
   Print a copy of the seller's listing on the auction site. Keep copies of each e-mail. Make notes on any phone conversations. In other words, record every step in the transaction. Keep those in a safe place until you've received the item and everything's great.
8. If you get burned in spite of taking precaution, file a complaint.
   If you feel you've been victimized by an online auction transaction, file complaints with the Federal Trade Commission (online at www.ftc.gov or by phone toll-free 1-877-FTC-HELP (382-4357), and with the NCL Internet Fraud Watch (online at www.fraud.org or by phone toll-free 1-800-876-7060).