Things to Take Note to Prevent E-auction Fraud When A Consumer Participating In An E-auction

E-Auction Fraud
Millions of people take part in Internet auctions everyday, bidding on items from around the world. Buyers and sellers both benefit from the great opportunities that e-auctions provide, but these auctions also give criminals the opportunity to perpetrate fraud.

How E-auctions Works
E-auctions work when prospective buyers examine the descriptions and photos of items and decide whether to place bids. The highest bidder wins. Upon winning, the buyer sends payment for the auction item, possibly to an online escrow service that holds payment until the buyer receives the goods.

How Auction Fraud Happens to Buyers
* Failure to deliver goods after the buyer purchases it.

* Misrepresentation of merchandise in an attempt to deceive the buyers concerning its true value.

* Hidden or separate charges such as fees for postage, handling, and shipping container.

* Fake bidding by seller in an attempt to drive up the price.

* Credit card fraud where seller uses the buyer's name and credit card number for fraudulent purposes.

* Black market goods such as stolen and reproduced goods.

Prevention of E-auction Fraud for Buyers
1. Learn how an e-auction runs, what your obligations are as a buyer, and what the seller's obligations are before placing a bid.

2. Find out what actions the web site/company takes if a problem occurs and consider insuring the transaction and shipment.

3. Investigate the seller as much as possible. Call the seller to see if the phone number is working, or send an email to see if the email address is active.

4. Examine the feedback rating on the seller.

5. Evaluate your payment options. Paying with credit card ensures the most protection if buyer can dispute the charges when the merchandise does not arrive or was misrepresented.

6. Consider using an escrow service if purchases on credit card are not disputable or the goods are not covered by insurance.

7. Examine whether escrow service is licensed and bonded.

8. Find out if shipping and delivery are included in the auction price or are additional costs so there are no unexpected costs.

9. Do not give out any personal information such as identification card number, driving license number, or bank account numbers to the seller to protect yourself from identity theft.

10. Most importantly, DO YOUR HOMEWORK! Be sure you understand what you’re bidding on, its relative value, the seller’s identity and return policies, and all terms and conditions of the sale.

With a better understanding concerning e-auction fraud and its prevention, buyers could keep these risks at a minimum when participating in an e-auction and enjoy the benefits of e-auction.