DOJ and FTC offer guidelines about online auction scams: Internet Scambusters #653
Online auctioneers may have stepped up security against auction scams but they just can't stop the crooks.
Both the Department of Justice and the Federal Trade Commission are sufficiently concerned about the dangers as to offer guidance on how to check for phony deals, as we report in this week's issue.
We also have a warning for Disney vacationers about the risks of booking with a bogus agency.
Now, here we go...
Government Agencies Urge More Vigilance on Auction Scams
We've been writing about online auction scams for 20 years -- but despite greater security by the auction companies and law enforcement agencies, they continue unabated.
In fact, these scams have become more sophisticated and convincing, so they still snare thousands of people every year all over the world.
Just a few weeks ago, in the UK, a man was jailed for two years after setting up an eBay account in the name of his five-year-old son and scamming victims out of more than $150,000 for non-existent car parts.
In the "old" days, eBay was just about the only name in the online auctions business but these days there are many more, some with poor track records and dubious operating methods.
So much so that auction scams featured prominently in a new 15-page advisory from the U.S. Department of Justice about the dangers of shopping online.
Vigilance is the watchword, said the DOJ, urging shoppers to exercise "due diligence" before buying online and be wary where payment is requested outside the auction site's normal methods.
America's consumer watchdog, the Federal Trade Commission (FTC), has also weighed in with comprehensive guidance to online auction participants.
"Before you commit your money or personal information, get to know how the site and seller operate, what you're really bidding on, and scams that may crop up," says the Commission.
"That way you'll have better odds of having a good experience as you hunt for that good deal."
As a starting point, you should make sure you understand fully how the site operates and know its rules for both sellers and buyers. For example, make sure the site allows safer payment methods like credit cards and that it has strict controls in place to protect your privacy.
Crucially, a good auction site should have procedures in place for dealing with disputes.
Then: "Before you bid on something, get to know the usual price range for the item and its features," the Commission advises.
"That will make it easier to spot a listing that promises more than it will deliver. To compare products online, you can type the item name and the word 'buy' into your search engine and look at the results, or view several listings for the item on the auction site."
Listings that use generic photos also mean you can't be sure the seller actually has the product or what its condition is, though, it has to be said, many genuine sellers do actually use stock photos these days.
And beware of brand name products offered at extremely low prices. They may be counterfeit.
Other aspects you should be aware of, says the FTC, include:
- Sellers who only take untraceable payments like reloadable debit cards or wire transfers. Don't do business with them, the FTC says bluntly.
- Poor feedback from past customers. Trust your gut instincts if you don't like what you see.
- Whether the seller offers a warranty (and for how long) and has a product return policy.
- Ask questions if the description isn't complete and judge the seller by how they respond to your inquiries.
"Before you bid," says the FTC, "decide how much you're willing to spend and then stick to that amount.
"Sometimes shill bidders -- working with the seller or on their own -- bid on an item to intentionally drive up its price.
"When you calculate your top bid, consider the other costs you might have -- like shipping, handling or taxes -- to receive or return the item.
"If you're the highest bidder when the auction ends, print or save copies of the item description and final price.
"Pay for the item within the seller's and site's deadlines using your credit card, a secure online payment system or an escrow service that the auction site recommends."
Consumer laws require sellers to ship within the timeframe they stipulate on the auction site or within 30 days if no date is specified -- but make sure you know the site's deadline for filing a complaint if the item doesn't turn up.
And if it doesn't turn up, start by contacting the seller. If he/she can't resolve it, ask the auction site to help. If you used a credit card to pay, file a complaint with the card company who may even be able to withhold payment.
Finally, whether you're a buyer or seller watch out for:
- Scammers posing as the auction company asking you to validate your account information by clicking a link. Legitimate auction companies don't do that.
- Requests by supposed bidders or sellers asking you to communicate outside the auction site. It's highly likely they're scammers and you won't be covered by any of the site's consumer protections.
- Similarly, avoid requests for payment outside the auction site's own payment process. Crooks may claim the online system isn't working and they need the cash desperately. Better to forego your winning bid than pay this way.
If you're already a victim of an online auction scam, you can file a complaint with the FTC.
Alert of the Week
Several families have been hit by what seems to be a phony online hotel-booking agency offering cut-price accommodation for Disney vacationers in the United States.
The victims pay in advance and then when they turn up at the hotel, there's no record of the reservation -- and the booking agency has disappeared.
Best to book directly with a hotel but if you do use an agency, check their reputation before using them, pay by credit card, and phone the hotel to confirm your reservation.
That's all for today -- we'll see you next week.