Fraud runs rampant across the Internet and online auction sites are a magnet for those dishonest individuals who want to steal your money. From the mega-giants like eBay to the mom & pop auction sites, the scammers find their way there if they think there’s any chance of snatching a dime out of your pocket. Even with all the safeguards put in place by those sites trying to eliminate their presence, these rip-off artists still somehow find their way into your trust and then your pocketbook. Whether its international thieves from Nigeria and other countries, or simply delinquent kids here in the United States, the problem has reached serious proportions. It appears law enforcement agencies have very little time and minimal resources to combat the problem in any real depth. As CEO of UpperBid.com Online Auctions, I see the problem first hand, and I am writing this article in hopes it will help buyers avoid getting ripped off.

Spotting the Rip-off Seller

Fortunately for the buyer, identifying the rip-off seller is usually not a difficult task since most dishonest sellers tend to be sloppy, lazy and not very bright. Their success usually only comes off the gullibility and innocent trust of their victims.
The most obvious red flag in identifying the rip-off seller is when you are somehow able to purchase an item for way below the cost it is being sold for everyone else on the web. The scammers will usually place an item at a much lower price since their objective is close the sale and placing it close to the price of other sellers will most likely not produce any sales for them, especially on a different auction site other than eBay. They will usually focus on high-ticket items that are in high demand such as computers, video game systems, and phones. They are less likely to place something up for sale that will take a long time to sell, no matter how valuable. They want the quick buck and they want it now. The more in demand the high-ticket item you are buying is, the more scammers there are trying to pretend they have that item for sale. The wise saying, “If it’s too good to be true, it probably is” definitely applies here. You simply are not going to get a computer or some other item for $500 that is selling everywhere else on the web for $1000.
In addition, look at a seller’s other auctions if the site allows you to. Scammers generally tend to have only a few auctions (usually dutch on each one when allowed by the site so they can get more sales on each listing) and these are almost always only for high-ticket items way below the going price. Since they tend to be the laziest bunch in society, you will usually not find more than a few auctions listed. They simply don’t like to do any real work. Of course, there are always exceptions to this, but it is rare.
Often with a scam seller, you will find sloppy and quickly pasted together titles and descriptions that ramble on that show very little skill in how to sell an item, but this in itself doesn’t mean it’s a rip-off seller. Also, they can sometimes have a very good description, but again, since they are usually lazy, they just cut and paste this from some legitimate auction somewhere. This sloppiness should only be considered if it is in conjunction with other signs.
One of the most important considerations when dealing with sellers is to look at their feedback provided on the site where they are selling. If there is no feedback, there is of course more risk to you. Seldom will you find a scam seller with feedback on a legitimate auction site, though there are exceptions to this. Even when there is feedback, check the dates of the feedback and see how recent or old the feedback is. If you see a long-term steady stream of feedback over many months to present, that is a good sign that it is probably a legitimate seller. Scammers do sometimes sell a couple of items at a low price to get good feedback or may use another second account to generate fake feedback, so if all the feedback is recent, then the feedback becomes less valuable for determining validity. Having said this, there are a lot of legitimate new sellers who don’t have any feedback yet and feedback alone should not deter you from making a purchase unless you see a lot of the other signs mentioned here.
Another sign often found with scammers is their insistence of urgency in paying for the auction item since they are worried about getting caught or discovered and not getting the money. They may even use the words “immediately” or “as soon as possible” when asking for payment. Sometimes you can see this in their auction listing itself.
It is getting more and more difficult to identify rip-off sellers from the methods of payment they accept since I have seen a trend of more of them using Paypal and Google checkout now. But generally, if a seller will only take Western Union, check and/or money order, that is a red flag. The more options they accept for payment, the more likely they are a legitimate seller since it is more difficult to get setup at more than one payment processing company (say both Google and Paypal) and they are also generally lazy. Yet, be careful of this too since I have seen them offer these forms of payment but then try to push you towards another method of payment if you request the one they really can’t use. For example, they may offer Paypal, but then try to tell you they have problems with that account and try to push you toward one of the other methods they offer. They may also try to push you to use an escrow service or payment processing service you have never heard of before, which often is merely a fraudulent site set up by the rip-off seller to solicit your credit card information.

Payment Options for the Buyer

We now need to review payment methods the buyer can use and examine the safety and risks of each method.
If you are a buyer, I strongly suggest that you never, ever send cash. In addition, a request for payment through Western Union is a favorite of scammers, and should be avoided. If a seller cannot take any other form of payment, that should raise a red flag. Checks and money orders should never be used for high-ticket items. If you must use a check or money order for any amount, I strongly recommend writing on the back of the instrument “For Deposit Only.” This will make it much more difficult in the case of a scammer since they will need to actually deposit it into a real bank account that can later be traced back to them. We actually require sellers on UpperBid.com who accept checks or money orders on our site to be willing to take them with “For deposit only” on the check.
It is probably best to now bring up the danger of escrow services and payment processing services. Be careful when considering the use of an escrow or payment processing service unknown to you, because there have been hundreds of fake escrow services and payment processing services popping up across the Internet for years now. If you have a seller trying to get you to use a specific escrow service or payment processing company you have never heard or, be very wary. Even if you find one on your own, make sure you do your research to ensure they are a valid legitimate company that you can trust. They will often fraudulently use logos of the Better Business Bureau, Verisign and other such graphics to give them a look of authenticity. If you get conned into using a fake service, then they will charge your card and cause you all kinds of problems once they get that information.
The safest way for you to pay at this point on the Internet is through Google Checkout or Paypal if directly using your credit card to pay since they process your transaction from your credit card and the seller never sees the actual credit card information. There are a few others as well that are legitimate and allow you to pay with a credit card, but these are the two most reliable. If you end up getting scammed, you can dispute the transaction with your credit card company as long as you pay directly from your credit card for the product or service.
Many readers may think paying from your Paypal account is the safest method, but unfortunately this definitely is not the case. The Paypal Buyer Protection Policy “only applies to items purchased on eBay or to payments funded through your debit card and processed through the ATM debit network.” And it does not cover non-tangible goods, live auctions, or vehicles (even if on eBay) and does not provide protection for non-eBay purchases. Even the coverage for eBay purchases is limited to only $200 of the cost in many cases. They may cover up to $2,000 if strict requirements are met (seller has a feedback rating of at least 50, seller’s feedback is at least 98% positive, seller has a verified premier or business account in good standing, Paypal is listed in the description as an acceptable payment method, and the seller is from a list of specified countries). Also, there are flaws in this protection system even for eBay purchases. For example, if you file a claim for an item not arriving, and then the seller sends the item to you, you will not be able to open up another claim if the product is defective or not as described.
Here is their description of their various Buyer Protection programs from their site:
Buyer Protection Programs. If you buy an item using Paypal and either do not receive the item or receive an item that you believe is Significantly Not as Described by the seller, we encourage you to open a Dispute with the seller in our Resolution Center. By doing so, you will initiate our Online Dispute Resolution Process—a step-by-step system designed to facilitate communication between you and the seller in order to get resolution of the issue. If your dialogue with the seller fails to produce a satisfactory result, you can then escalate the Dispute into a Claim that we will evaluate for reimbursement under one of the following programs:

1. Paypal Buyer Complaint Policy - Our best efforts program to reimburse Users for losses only to the extent we are able to recover the funds from sellers.
2. Paypal Buyer Protection Policy - Our program to reimburse Users for losses for up to (i) $2,000.00 USD (Top Tier Coverage Amount) for eligible items purchased on eBay and (ii) up to $200.00 USD (Basic Tier Coverage Amount) for all other eligible items purchased on eBay and for eligible items purchased on eBay. Please see section 13.9 to determine whether Top Tier Coverage Amount or Basic Tier Coverage Amount applies to your eBay purchase.
3. Buyer Protection for eBay Express - Our program to reimburse Users for the full amount of losses for items purchased on eBay Express.
4. Extended Buyer Protection with Paypal Credit - Our program to reimburse Users for the full transactional amount of the items purchased using Paypal Credit.

These programs only cover payments for tangible, physical goods. All other payments, such as payments for intangibles, services, airline flight tickets, or licenses and other access to digital content are not covered by any Buyer Protection Program that we offer (but may be covered by Chargeback rights).

When using your Paypal account for the purchase of non-eBay goods, you are eligible for the Buyer Complaint Policy process of dispute and then claim, but there is no guarantee that you will recover anything in the case of a fraudulent transaction. Using a credit card to pay through the Paypal system if you are able to is only way to ensure you have control of your protection, since you can dispute any charge with your credit card company if you are ripped off. Paypal tries to discourage this type of payment and if you send a payment request to a Paypal registered email account, you will not see a payment by credit card option when you click through to the Paypal site. On the other hand, if you have the request sent to a non-registered email account, there is a link on the bottom that you can click and pay via your credit card without even using your Paypal account. It is highly advisable to have the seller send a payment request to an email address that is not registered with Paypal so you can pay with your credit card.

Summary for Safe Auction Buying

We will now summarize the above contents into a number of steps reduce your risk of getting ripped off when considering the purchase of an item for sale at an online auction.

1. Compare the final purchased price to that of the same item being sold elsewhere on the web.
2. Look at the other items a seller has for sale.
3. Review the quality of the listing’s title and description.
4. Examine the seller’s feedback.
5. Keep an eye out for an unnatural insistence for urgency in payment.
6. Evaluate their payment methods they accept.
7. Be wary of any changes they try to make regarding payment.
8. Pay by credit card only through an established credit card processing company.

Most sellers are honest, hardworking individuals who have great products and services. It is only the small minority of dishonest sellers who make these steps necessary. Now that you have this valuable information to assist you in weeding out the scammers, enjoy a wonderful shopping experience as you find the great deals out there at online auctions.

Robert King, CEO
http://www.upperbid.com

Biography – Robert King is CEO of UpperBid LLC, the company that runs the online auction website http://www.upperbid.com. He has been involved with online auctions in a variety of capacities since 2001, including as a former eBay power seller and store owner. In addition, he has managed and administered a variety of different websites since 1999.