What To Do If You Are a Victim of Online Auction Fraud

Online auctions can be a great way to purchase quality goods at discounted prices or make extra money. Popular online auction platforms, such as eBay, make the online marketplace an easy way to connect legitimate sellers with buyers. Unfortunately, there’s the potential for online auction fraud.

We discuss steps to take if you fall victim to online auction fraud. We also discuss how to prevent future scams, safeguard your personal information, and limit exposure. To learn about your legal rights relating to online auction scams, talk to a consumer protection lawyer near you.

Understanding Online Auction Fraud

Online auction fraud is a serious consumer threat. Consumer protection for online auctions is critical. Because online auctions have little oversight, scammers target auction websites for their fraudulent activity. Online auction participants aren’t usually subject to many business regulations designed to protect consumers.

Online auction platforms are often peer-to-peer businesses. You don’t have to deal with a merchant. As such, this type of business model can be especially susceptible to fraud.

Common Types of Auction Fraud

Online auction fraud occurs on online auction websites. It’s a type of fraud where scammers try to steal goods or money from unsuspecting victims.

In the most typical auction fraud, fraudsters exploit customers by engaging in fraudulent transactions. Scammers can misrepresent goods in the item description, fail to deliver items they’ve sold, or intentionally drive up the item’s price through shill bidding.

Whether you’re buying or selling, you may run into any of the following potential problems.

Misrepresentation

Misrepresentation in online auctions involves misleading consumers about the auction items offered for sale on an auction website. A scammer can do any of the following:

• Provide incorrect details about the item offered for sale
• Provide fake or otherwise misleading images of the product
• Post fake reviews of their items

Misrepresentation can involve the fraudster trying to increase an item’s price or sell an item they couldn’t otherwise sell.

Non-Delivery of the Auction Items

Non-delivery of auction items occurs when a seller posts an item and fails to fulfill the order. They never send the item. The fraudster keeps the entire item’s value without ever providing you with a real service.

Fake Bidding

Fake bidding, also called shill bidding, occurs when a fraudulent seller increases the final sale price of their product by bidding on their own products. This drives up demand and the cost of the item.

Black Market Goods

Who wouldn’t jump at the chance to purchase high-value items for a lower price than you would pay at retail? Fraudsters prey on the desire for goods like high-end clothing and accessories. Scammers target products that someone can fake. They try to sell the items for far more than their value.

Steps To Take If You’re a Victim

Reporting online auction fraud may help your case. You can report fraud on an online auction platform in several ways. These include filing a complaint with the following:

• The online auction website where you experienced fraud
• The Federal Trade Commission’s (FTC) consumer protection website
• The FBI’s Internet Crime Complaint Center (IC3)
• The National Consumer League’s Fraud Information Center
• Your local law enforcement agency
• Your state attorney general’s office

Doing your part to report online crimes or suspicious activity is an important step. It helps prevent future fraud in online auctions and improves reliability and trust in online auctions.

Gathering Evidence and Protecting Personal Information

If you experience online auction fraud, gathering evidence is critical to the investigation. It may be able to help you recover. Like other online transactions, keeping copies of your records is beneficial. These records include the following:

• E-mails and confirmations
• Photographs of the auction item
• Packing slips
• Tracking numbers
• Policies and terms related to the transaction

It’s also helpful to note the bid’s time, date, and price.

Protect Your Personal Information

Being victimized during a single online auction transaction is bad enough. However, the fraudster stealing your personal information and engaging in identity theft could cause problems for years. They can use your credit card information to commit credit card fraud or open new accounts.

Here are some steps to protect your personal information:

• Provide only necessary information: You’re likely required to provide basic contact information such as your name, address, and phone number for delivery purposes. But avoid providing more. Providing sensitive information, such as your date of birth, social security number, driver’s license number, or bank account information, is unnecessary.
• Avoid unusual payment methods: Online auction sites are often set up to handle payments securely. There’s no reason to provide account numbers directly to the seller. If they ask you for debit card, bank, or credit card details, it’s probably a scam. It’s also a red flag for fraud if the seller requests that you send gift cards or money orders or request a wire transfer.

Tips To Avoid Future Auction Scams

Understanding how the auction site works before bidding is critical to avoid an online auction scam. Review the terms and conditions for the auction site. Terms and conditions typically explain the following:

• Acceptable payment methods
• Insurance policies
• Seller guarantees
• Shipping policies
• Fees charged

Other considerations for avoiding future auction scams include:

• Reviewing the seller’s feedback rating to look for any pattern of negative reviews from past buyers
• Evaluating whether the deal seems too good to be true
• Knowing whether the seller is from overseas (the majority of auction scams originate from foreign sellers)

Using a secure payment method, such as PayPal or a credit card, helps you avoid online auction scams.

Get Legal Help for an Online Auction Dispute

If you experienced trouble using an online auction site or were the victim of a scam while using an auction platform, there’s help. Hiring a consumer protection lawyer may help you recover from a scam or resolve a dispute. They can explain how federal and state laws protect you from internet auction fraud schemes involving deceptive sellers or platforms.