Auction Online Sites - Risky?

A federal district judge recently issued a temporary restraining order and froze the assets of an Internet merchant who used an auction online site to offer merchandise, but never delivered the goods to the consumers. The complaint alleged that Craig Hare used online auction houses to offer new and used computers for sale. After "successful bidders" paid as much as $1,450 per computer, Hare provided them neither the computer nor a refund.

Auction Online Site Continue To Grow

Auction online sites have been around since 1995 and continue to gain in popularity. They are a "virtual" flea market from which you can choose from an endless array of merchandise from around the world. For anyone that desires to sell something on the Internet, online auctions provide a worldwide storefront where you can market your goods.

Auction Online Fraud Grows

But auction online sites can be risky business, according to the Federal Trade Commission (FTC), a federal agency that works to prevent fraud, deception and unfair practices in the marketplace. Among the thousands of consumer fraud complaints the FTC receives yearly, those dealing with online auction fraud consistently rank at or near the top of the list. The complaints generally deal with late shipments, no shipments, or shipments of products that aren't the same quality as advertised; bogus online payment or escrow services; and fraudulent dealers who lure bidders from legitimate auction sites with seemingly better deals. Most complaints involve sellers, but in some cases, the buyers are the focus.

What can you do to not be an Online Auction statistic?

Here are some tips from the FTC.

- Become familiar with the auction online site. Never assume that the rules of one auction site apply to another

- Find out what protections the auction online site offers buyers. Some sites, such as ebay, provide free insurance or guarantees for items that are undelivered, not authentic or not what the seller claimed.

- Know exactly what you're bidding on. Read the seller's description of the item or service, and if a photograph is posted, look at it. Read the fine print.

- Try to determine the relative value of an item before you bid. Be skeptical if the price sounds too low to be realistic.

- Find out all you can about the seller. Avoid doing business with sellers you can't identify, especially those who try to lure you off the auction site with promises of a better deal.

- Find out who pays for shipping and delivery. If you're uncertain about shipping costs, check with the seller before you bid.

- Check on the seller's return policy. Can you return the item for a full refund if you're not satisfied with it? If you return it, are you required to pay shipping costs or a restocking fee?

- Email or call the seller if you have any questions. Don't place any bids until you get straight - and satisfactory - answers. - Save all transaction information. Print the seller's identification; the item description; and the time, date and price you bid on the item. Print and save every email you send and receive from the auction company or the seller.

- Protect your privacy. Never provide your Social Security number, driver's license number, credit card number, or bank account information until you have checked out the seller and the online payment or escrow service, if you're using one, to ensure legitimacy.

- Online Payments. If you use an online payment service find out whether it offers buyers any recourse if sellers don't keep their end of the bargain (PayPal offers a guarantee service), whether it prevents sellers from accessing their funds if buyers are not satisfied with the product, and who is responsible for paying for credit card charge backs or transaction reversal requests (normally the seller’s responsibility). To limit your exposure, consider reserving a separate credit card, stored-value card or bank account to use just for online transactions.

For millions, auction online sites such as ebay are enjoyable experiences where people can buy great bargains and sell goods with almost no overhead or outrageous fees. Payment services such as PayPal are also provide great services for millions of online sellers and buyers by protecting personal information and providing levels of protection from online auction scams.