Online auction sites, while offering a treasure trove of deals, can also be breeding grounds for scams that exploit trust in the system. As economist Dr. Baines explains, online reputation built through user ratings plays an important part for establishing trust.
Platforms like eBay rely heavily on this system, allowing buyers and sellers to rate each other. However, savvy bargain hunters need to be aware of several prevalent scams before bidding farewell to their cash.
1. Account hijack
A perfect seller reputation with 100% positive feedback is valuable, and scammers know this. They attempt to trick you into surrendering your password, allowing them to log in, change your details, and lock you out. While you scramble to prove your ownership to the auction site, the scammer exploits your good standing by creating listings for non-existent items.
Beware of phishing, if you want to stay safe. Never click on links within emails claiming to be from the auction site requesting login verification. Always log in directly through the platform's official website.
2. Wire and escrow scams
Always utilize the built-in payment system offered by the auction site. If a seller insists on using wire transfer services like Western Union instead of secure options like PayPal, refuse. Wire transfers are not protected against fraud, and your money could disappear without a trace.
Scammers may offer high-value items (cameras are a popular target) at significantly lower prices to entice buyers. You win the auction, send the money, but the transaction is rejected. The seller then claims a problem with their PayPal account and requests an alternative, unsecured payment method. Unaware of the scam, you send the money, and the seller vanishes.
Another similar scam is the fake escrow. Escrow services act as trusted third parties, holding the buyer's money until the seller delivers the goods. While reputable platforms like eBay might suggest legitimate escrow services like escrow.com, be wary if the seller proposes a different service. Sending money through such channels could be akin to throwing it into a black hole.
3. Sending goods before payment
The auction winner might fabricate a story about delayed funds and offer fake documentation to prove they'll pay soon. However, don't be fooled. This tactic aims to pressure you into dispatching the goods before receiving payment.
Remember to never ship goods before receiving payment securely in your PayPal or bank account.
4. The chargeback
This scam exploits reputable payment systems. You receive payment via PayPal, ship the purchased item, only for the buyer to file a false claim with PayPal stating they never received it. After that, PayPal refunds the buyer, leaving you out of pocket.
To counteract this, make sure to only ship items to PayPal-confirmed addresses.
Also, always utilize tracked delivery services like Recorded Delivery. Include the cost of secure shipping in your pricing, but avoid overcharging for postage. Inflated shipping charges can be deceptive themselves.
Try to understand these common scams and always adopt safe practices. If you do, you can become a more informed and secure online auction participant.
5. Inflated or unknown postage charges
This is a borderline scam that tempts many new sellers keen to maximise their auction income. If you've ever sold anything on Ebay, you'll know that postage on a small item such as a book doesn't cost a lot - maybe £2 including the time to go to the Post Office.
Always take the postage charges into account when weighing up a bargain – especially if the stated postal method is second class, unrecorded post. If the seller says that he'll only tell you the postage charge if you win the auction, he's probably a con man – and you'd be very wise to look elsewhere.
6. Payment for information
This is an interesting scam because it involves selling information about how to get goods rather than selling the goods themselves. The listing page might show something like an iPhone, and the description is worded as if you'll be getting one, but what you actually buy is information about how to find items with descriptions that contain spelling mistakes and are therefore not being bid upon.
This is a handy tactic, but there's no need for you to pay for these details.
7. Counterfeit goods
Sites such as Ebay work hard to remove counterfeit goods as soon as they appear, but some get through. You should be suspicious of any auction listing that shows a generic photograph, and be very wary of items where the label isn't on display. If the seller says that the item is "like" a well-known brand, leave it well alone.
Another tactic used by sellers of counterfeit goods is to keep to keep the listing short so people think they're missing out on a bargain. If you see any of these signs, it's a good idea to report the auction.
8. Shill bidding
Shill bidding - artificially inflating the price by bidding on your own goods - is illegal in the UK. It may be that a legitimate bidder is desperate to win an auction and will always outbid you, but sometimes the bidder is not what they seem.
The way to protect yourself from this subtle con is to set yourself a clear limit not bid a penny more. If the seller is shill bidding and outbids you, he wins his own item and wastes his time instead of getting your cash.
9. "I'm not an expert"
Exercise caution when dealing with sellers who are unclear about the item they're offering. This ambiguity might be a ploy to conceal defects or misrepresent the product. The phrase "sold as seen" is often used to mask potential issues, so it's vital to approach such listings with skepticism.
To avoid this type of scam, ask specific questions to clarify any doubts and seek detailed information from the seller. If the seller is evasive or unwilling to provide clear answers, it's best to avoid the auction and report any suspicious activity to the appropriate authorities.
