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Seller, beware!

Buyers at online auctions and classified sites aren't the only ones who stand to lose money if they get caught in a scam. During National Cyber Security Awareness Month, advocates are issuing a warning to sellers as well.

Did you know that the online classified sales site Craigslist receives more than 100 million new posts every month? Billions of dollars in merchandise are bought and sold through the Web site every year. Similarly eye-opening: eBay reports over 112 million active users who have bought or sold an item in the last year. With so many transactions being processed and money changing hands, many scammers see Craigslist, eBay, and other online marketplaces as the perfect place to take advantage of consumers. In typical online buying scams, the buyer is at risk of “purchasing” fake or non-existing products. However, scams targeting the sellers of goods should be a concern to consumers as well. Seller, beware!

October is National Cyber Security Awareness Month. All month NCL, in partnership with the National Cyber Security Alliance, the Department of Homeland Security, and many other organizations is encouraging consumers to adopt safer online habits. Fraudsters often target people through email, tricking consumers into divulging personal information that leads to a scam. NCL’s Fraud.org receives hundreds of complaints every month from people who have been scammed online. Two consumers who fell victim to the fake buyer scam shared their stories with us recently.

This summer, a woman we’ll call “Mary” from New Jersey listed her Blackberry z10 smartphone on eBay for $425. She was elated when the auction closed and the phone sold for $485, well above her asking price. Upon receiving an email from “PayPal” saying the buyer had paid, Mary was ready to ship the phone. The buyer requested that Mary send the phone to Africa for the buyer’s son’s birthday, which she did. Days passed by and then weeks. Mary desperately tried to contact the buyer but was unable to reach her and later found out that the “PayPal” email was a forgery.

Another woman from Florida told us how she listed an antique accordion on eBay for $3,400. After the instrument was sold she too received a notification that the item had been paid for and she shipped out the product. Unfortunately, the payment never arrived.

There is big money to be made from selling items online, but make sure you follow these important tips:

  • Do not put too much personal information in your online ad. Use the anonymization service offered by Web sites like Craigslist instead of listing your personal email address or phone number.
  • Be wary of interacting with buyers who claim to be located overseas or request you send the product to a different country.
  • If you are unsure if the buyer is trustworthy, call them. Scammers often try to maintain anonymity. If you are unable to reach them by phone, they may not be a serious buyer.
  • If you are meeting your buyer in person, never do so alone. Have a family member or friend with you. Strength in numbers!
  • If the item is easy to transport and the buyer lives near your house, meet in a safe, mutually agreed-upon public place to hand over the item and collect the payment.
  • If dealing with a buyer in person (such as via a Craigslist ad), consider insisting on cash payment to avoid fraudulent personal or cashier’s checks.
  • Don’t rely on email confirmations of electronic payment, since these may be fabricated. Instead, log in to your account (e.g., PayPal) on your own to check and make sure that the funds arrived. Only then should you ship the merchandise.
  • eBay has a seller protection policy that helps guard sellers from being defrauded by scammers. Click here to learn more about this program and remember to take advantage of it if something goes wrong in an auction.
  • For information offered by Craigslist about how to deal with abuse issues, click here.

For more information, or if you think you have fallen victim to a scam -- either as a seller or as a buyer -- in an online marketplace, visit Fraud.org.