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Internet Auction Fraud

People who become the victims of fraud through online auction sites are often persuaded to send the money fraudulently obtained from them through money transfer service providers.  This section of the fraud alert website aims to provide advice that hopefully will prevent you from becoming a victim of such frauds.

Internet auctions - the basics

  • Get to know the parameters set by the site – they are in place to ensure user safety.  Read the safety advice provided by the online auction site before trading.  Never step outside the site no matter how enticing the deal.  Fraudsters will try to trick you into doing this.
  • When looking at an advertised item, compare pricing.  Beware of people offering you a deal below the current bid or reserve price, especially if they are contacting you direct.  Remember, If an offer sounds too good to be true, it probably is.
  • Get to know the seller by looking at their selling history and the goods they sell.  Be extremely careful around the payment method used for someone selling with little or no selling history.
  • Don’t get carried away in the excitement of winning an auction.  Fraudsters rely on you being over keen and off your guard.  It is never too late to ask questions of a seller to ensure that you are completely happy with what you are about to pay for.  Do not follow through if you think it is a fraud; report the seller to the site.
  • Finally, if your site offers ‘second chance’ bidding on an auction, verify that any notification of you qualifying for this ‘opportunity’ actually comes from the site and not from a fraudster impersonating them.  You can do this by carefully checking the address from which the email is sent.

Internet auction - payment

  • Never use money transfers as a payment method whenever someone suggests this to you, even if it is by the seller after you have ‘won’ the auctioned item or when approached to step outside the online auction site.  There is little security in this, no matter what the seller says, and you are effectively sending your hard earned cash to a stranger ‘on trust’ alone.  
  • Be extremely careful around direct banking transactions to pay for goods.  There is still little security in this area also, which increases if the seller has no or little trading history with the online auction site you are using.  
  • Use the online payment options or a reputable Escrow account to pay for items.  Escrow is a payment system where both buyer and seller’s financial details are held separately and in isolation by a legitimate third party company acting as ‘middleman’.  The buyer makes their payment into the Escrow account.  The payment is only made to the seller after the goods have arrived and been deemed satisfactory by the buyer.  By doing so, your transactions will be better protected and often insured.
  • Never enter an Escrow account site through a link in an email sent to you by anyone, as it has not been unknown for fraudsters to set up fake Escrow websites.  Use a search engine to locate the website or enter your chosen Escrow site through its proper web address.  Always check your web browser address bar.

Internet auction - the seller

  • When a cheque is accepted for payment, please be aware that although your bank or building society may after three days state that it has ‘cleared’, this only means that the money has passed between the banks.  
  • You remain liable if the cheque that you have paid into your account is forged or stolen; this may not come to light until the cheque is received by the other bank or the bank account holder queries a transaction on their account.  This may take longer than you anticipate.
  • The money is then taken back from your account, so you lose not only the items that you have shipped to the ‘Buyer’ but also the money that the buyer ‘paid’ for the goods.
  • A common trick that fraudsters use is known as ‘Criminal Cash Back’ where a seller accepts a cheque for an amount higher than the value of the transaction, often to pay a ‘shipping charge’ to the buyer’s ‘shipping agent’.  This is actually paid to another fraudster who receives ‘clean’ money from you.  You then find out at a later stage that although the cheque paid to you has ‘cleared’, it is a stolen or forged cheque, and you must pay the money back to your bank with no hope of getting the money back from the bogus ‘shipping agent’.

Internet auction - account security

Protect your online auction account details as you would your own bank account, whether it be your actual log-in details and password to your auction account or your payment account.  Do not become a victim of identity theft by revealing your name or account details.  Be aware of phishing emails that claim to come from the online auction or payment site you are registered with, asking you to update your account or re-enter your details because your account has been suspended.

Who should you contact?

If you believe you might be being set up as a target for fraud or have been a victim of this type of fraud and need advice, contact your local police.