Prevent Online Auction Fraud

Millions of people take part in internet auctions every day all around the world. These auctions give criminals the opportunity to perpetrate fraud. According to the National Consumers League, online auction fraud is the number one fraud committed over the internet.
Both consumers and merchants can be victims of on line auction fraud.
· The seller may fail to deliver the goods.
· The buyer fails to send payment.
· The seller falsely represents the merchandise or it’s true value.
· The seller adds separate hidden charges, causing the buyer to pay more.
· Fake bidding drives up the price of the merchandise.
· The seller uses the buyer’s name and credit card number for fraudulent purposes or the buyer uses a fraudulent credit card.
· The buyer offers stolen or copied products, which arrive with no warranty, instructions or box.
· Bogus escrow services receive payment from the buyer but pocket the money, never forwarding it to the seller.
Preventing Online Auction Fraud:
  • Investigate the seller before bidding. Check the seller’s feedback rating.
  • Call the seller to confirm the phone number is working.
  • Attempt to pay the seller directly, without an escrow service, and use a credit card so you can dispute the charges if the product does not arrive or was misrepresented. If possible avoid paying with a check or money order.
  • Check to see if the goods are covered by insurance, if a return policy is in place and if the product comes with a warranty.  If using an escrow service, make sure it is bonded and licensed.
  • Remember: Do not give out your social security number, driver’s license number, or bank account numbers, as sellers do not need this information.
  • Do not send your credit card numbers electronically unless you know for sure the web-site is secure and encrypted.
Reporting Online Auction Fraud:
· File a complaint with the online auction company.

· Notify the local police.

· File a complaint with the Better Business Bureau in the seller’s area

· Fill out the online complaint form at

· File a complaint with the Internet Fraud Complaint Center (IFCC), a partnership between the National White Collar Crime Center (NW3C) and the Federal Bureau of Investigation (FBI),