On-line Auction
is one of the few bright spots in dotcom ventures.
It is a big business today with millions of participants
across continents, buying and selling millions
of products everyday. Tens of thousands of people
around the globe currently make a full-time living
selling items through Internet auction houses.
Major reason for such incredible growth and popularity
in an otherwise gloomy dotcom scene is the simplicity
and phenomenal reach of Internet auction. People
find it simple and convenient to get great deals
from around the world.
The excitement also makes them prime victims
for scam artists, ready to play on the desire
many auction bidders have for that "unbelievable
deal."
This is not to doubt the integrity of vast majority
of honest buyers and sellers who deliver on promises.
According to eBay, only one auction in 40,000
on their site ends with a reported case of confirmed
fraud.
However, it is also true that above statistics
doesn't take into account unreported cases and
in any case it's little comfort if you find yourself
the unfortunate one in 40,000.
In fact, on-line auction scam accounts for roughly
48% of all online fraud reports to the Federal
Trade Commission (FTC) of USA. Almost 500 reports
per week, committed by both sellers as well as
buyers.
So how do you protect yourself, short of simply
staying away from the online auctions ? Before
discussing the various auction related scams,
let us understand how Internet auction works.
What is On-Line Auction
The process of an online auction is much the
same as a live auction. Its a public sale in which
a seller specifies minimum amount for an item.
The buyers bids for the item for a duration specified
(ranging from 1 hour to 7 days). At the end of
the auction, the item is sold to the highest bidder.
Similarly, a buyer may participate in an auction
by bidding for an item. The person who offers
the highest bid wins the right to purchase the
item at that price. Successful bidders are notified
through email on the status of their bids.
Actual transaction takes place between successful
buyer and seller DIRECTLY without any significant
involvement of the auction house.
No physical inspection of goods, anonymous nature
of Internet communication, lack of rigorous legal
safeguards for buyers etc. make the process somewhat
vulnerable to swindlers and frauds.
Common Auction Scams
Internet Scambusters (www.scambusters.org) have
identified following most common frauds seen in
on-line auctions
- Misrepresentation
- Failure to ship merchandise:
- Failure to pay:
- Shilling:
- Bid Shielding:
- Piracy and counterfeiting:
- Internet Fencing:
- Triangulation:
- The "Buy and Switch":
- Fee stacking:
- Loss or Damage Claims:
- Shell Auctions:
We shall discuss each of them as also how to
safeguard your interest in next issue
|
