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Common Online
Frauds & Scams
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Online Auctions
- Beware when
dealing with sellers in other countries. If you have a
problem, the physical distance, difference in legal systems, and
other factors could make resolving it very difficult.
- Beware how
the auction works. Many online auctions simply list items that
people want to sell. They don’t verify that the merchandise
actually exists or that it is described accurately, and they
can’t guaranty that the sellers will keep their promises.
- Beware how
you pay. Whenever possible, pay by credit
card (not a bank account). Under federal law, you can
dispute the charges if you paid the seller with a credit card and
the goods were never delivered or if they were misrepresented. If
you are paying through an intermediary service, ask what happens
in the case of disputes.
- Beware of
“shills.” The seller may try to raise the price
artificially by making bids under fictitious names or recruiting
other people to make bids. Using bogus bidders is illegal and a
violation of online auction policies. Inform auction sites about suspected fraud. They may
have policies to remove sellers from their sites if they use
“shills” or don’t live up to their obligations.
- Beware of
the auction insurance policy. Some auction sites provide
insurance that covers buyers up to a certain amount if something
goes wrong. Others may have links to third-party programs that
offer insurance for a fee. Read the terms of the insurance
carefully. There is often a deductible, and there be other
limitations or requirements that apply. For example, you may not
be covered if the seller had a negative feedback rating on the
auction site at the time of the transaction.
- Beware of
claims about collectibles and other expensive items. Since you
can’t examine the merchandise or have it appraised until after
the sale, don’t assume that claims about its condition or
value are true, or that photographs are accurate. Print out and
save the description and any photos to document the claims that
were made.
- Beware of
bad sellers. Some auction sites have feedback forums with
comments about the sellers based on other people’s
experiences. Negative information is a good warning sign, but a
clean complaint record doesn’t guarantee that your
transaction will go smoothly. Some sellers are bonded through
programs that have investigated their business backgrounds and
credit histories and guaranty your money back if they don’t
fulfill their promises. Click on the program symbol to learn how
the bonding program works and verify that the seller is a member
in good standing.
- Beware if
the seller does not provide contact information. The name,
physical street address, email address, and phone number are
helpful to have for checking the seller out and following up later
if there is a problem. Don’t do business with anyone who
refuses to provide that information.
- Beware of
the return policy. Ask about delivery, returns,
warranties and service before you pay. Get a definite
delivery time and insist that the shipment is insured. Ask about
the return policy. If you’re buying electronic goods or
appliances, find out if there is a warranty and how to get
service.
- Beware of
high shipping cost.
Many auctions sell products cheap but have tremendous
shipping costs. Most
sellers do this because if you return the product they will only
repay you the price of the item (not the price of shipping). Therefore the seller makes money
if you keep the product or not.
Information on this website is provided by Chris Triolo, additional
information on internet Frauds and Scams can be found at www.FBI.gov or www.nclnet.org
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