Internet Auction Fraud
Many people hunt for bargains in the virtual markets of Internet auction sites. However, you should be aware of the potential risks when bidding in online auctions.
Buyers—Do Your Research
These tips may keep you from becoming a victim of online auction fraud:
- Become familiar with the auction site.
Some auction sites and most credit card
issuers offer fraud protection.
- Learn about the product before
bidding. Closely examine photographs.
Read the description including all fine
print looking for words like
discontinued, refurbished, off-brand, or
closeout. Be skeptical if the price
seems too low.
- Investigate a seller before bidding.
Verify information by contacting the
seller by e-mail or telephone. Check the
seller’s feedback to see what other
buyers experiences have been. Be wary
of sellers with poor or no feedback and
sellers you cannot identify.
- Check shipping and handling costs.
Generally, sellers specify the cost of
shipping with an additional charge for
optional express delivery. Sometimes
though a seller might try to recoup the
value of an item sold at a low price
through high, undisclosed shipping and
- Find out if the purchase can be
returned. Ask whether the item is
refundable and if restocking fees or
shipping will be charged. Be careful not
to damage the original packaging if
returning the item, and do not open an
item if it is not what was expected.
- Use caution with sellers insisting on
one particular type of payment. Check
out any unfamiliar escrow service by
visiting its website and calling the
consumer service line.
- Always protect your privacy. Never
provide financial information until you
are comfortable with the seller and the
method of payment.
- Save all transaction information. If
there is a problem, try to work it out
with the seller. If that does not work,
use the site’s dispute resolution service or its community message boards, if
available. Some escrow services and
shipping companies also offer dispute
resolution services. It is important to
save information like the seller's
identification; the time, date and price
bid on an item; and correspondence
with the seller and auction company.
Sellers may also be the victims of online
auction fraud. Fraudulent buyers may
target individuals selling high-end or bigticket
items through internet auctions.
A seller receiving a cashier’s check for
payment may believe it’s as safe as cash—
unaware they may lose the money
deposited into their account if the cashier’s
check is found to be counterfeit.
Sellers should be particularly wary if
instructed to cash or deposit a cashier’s
check for an amount greater than the
purchase price . The buyer may instruct the
seller to send the difference back via
cashier’s check or wire transfer. If the
cashier’s check is counterfeit, the seller will
not only have lost the auctioned item but
also the additional money returned.
File a Complaint
If you have a complaint about an internet
auction purchase, contact the Tennessee
Department of Commerce and Insurance’s
Division of Consumer Affairs.
To check out a company before you do
business with them
or to file a complaint
against a company,
an individual, or a
business entity, contact Consumer Affairs by
calling 1-800-342-8385 (toll free inside
Tennessee) or (615) 741-4737.