Are you itching to try the new online auctions like eBay and Yahoo, but don’t want to be ripped off? Here are some tips on making your online auction experience as scam-free as possible.
Read and Watch First — You will want to read all the rules and guidelines at the auction site, to make sure you understand thoroughly how the process works. Surf around and watch some auctions in action before trying to sell or buy an item yourself.
Use The Auction’s Feedback System — Many auction sites let users post both positive and negative comments and ratings on other users. While you cannot always trust positive feedback — it could be a friend or even the user themselves using a different email address — negative comments should make you think twice about getting involved in a transaction. You can also check auction info on who has bid on current and previously-sold items. This info can help you spot attempts to start bidding wars and otherwise manipulate the bidding process.
Check For Fraud Protection Programs — Some auction sites have programs that protect you against fraud in transactions under a certain amount (for instance, $200). You will have to pay a small processing fee and fill out a claim to recover your money if something goes wrong, but that is a small price to pay if it can prevent you from being the victim of an online auction scam.
Start Small — Starting out bidding on or selling a low-cost item lets you get your feet wet without serious consequences. If you make a mistake, or misinterpret the rules, you can chalk it up to experience and move on without serious consequences.
Watch For “Shills” — Sometimes sellers will have a friend (called a “shill”) bid up an item to encourage a bidding war. Some sellers have even been known to use alternate or phony email addresses to bid on their own items. You can sometimes spot an online auction scam by researching whether the same person has bid on other items the seller has previously listed. Often, a shill will have little feedback information, or the feedback information will come solely from the seller.
Watch For “Shields” — A “shield” is someone working with the buyer to artificially drive up prices and discourage other people from bidding on an item. The shield often uses a bogus email address, or withdraws a high bid at the last minute, allowing the buyer to take the goods at a low price. A shield may be at work if the person bidding higher has participated in other auctions where the lower bidder has also bid, or if there is a history of the higher bidder pulling out of bidding late in the game — indications that both are colluding in an online auction scam.
Use Your Credit Card — Paying with a credit card gives you a record of the transaction, and allows you to dispute payment if you do not receive the goods you have purchased or they are not up to advertised standards. Web payment services such as Pay Pal can also protect you. Never send cash through the mail.
Get Reliable Contact Info — It is pretty hard to track someone down if all you have is a fake email address. Make sure you get a physical address and phone number for anyone you’re doing business with. And it is a good idea to make copies of the auction site pages involving the transaction as you go along, just in case there’s a dispute later.
Consider Escrow Services — For a very small fee (usually around five percent of the total price), escrow services allow the buyer to inspect the goods before making final payment to the seller. If the goods are not what you expected, they go back to the seller and the transaction is cancelled.
Ship Safely — If you are selling an item, you will want to ship via some traceable method, like UPS or certified mail, so you can prove the buyer received it. Many sellers also include shipping insurance as part of the cost of the transaction.
Use Internet Dispute Resolution Services — Auction site dispute resolution services are springing up to help people locked in auction disputes resolve their conflicts quickly and cheaply. This may well be worth your effort if the item in dispute is worth hundreds or thousands of dollars and your transaction is across state lines.
If you have been victimized by an online auction scam, you may be able to obtain compensation with the help of an experienced consumer fraud lawyer. Contact Consumer Fraud Online to discuss your options with an attorney.