Monday, November 16, 1998

Internet Fraud Watch Online Auction Tips

The Internet Fraud Watch, a program operated by the nonprofit National Consumers League, receives more reports about problems with online auction purchases than any other type of Internet fraud. The most common problems are: merchandise never delivered; item misrepresented; goods damaged in shipment or defective. Online auctions can be a fun way to shop, but remember that in cyberspace what you see isn't always what you get. To help protect online consumers and prevent auction fraud, IFW is posting these tips permanently in the internet tip section of this website. When participating in an online auction use caution and common sense, follow these tips, and you'll be less likely to have a bad online auction experience.

• Understand how the auction works. Many online auctions simply list items that people want to sell. They don't verify if the merchandise actually exists or is described accurately.

• Check out the seller. For company information, contact the state or local consumer protection agency and Better Business Bureau where you live and also where the company is located. Look at the auction site's feedback section for comments about the seller. Be aware that glowing reports could be "planted" by the seller, and that a clean complaint record doesn't guaranty that someone is legitimate.

• Be especially careful if the seller is a private individual. Most consumer protection laws and government agencies that enforce them don't deal with private sales, so if you have a problem, it could be impossible to resolve.

• Get a physical address and other identifying information. You'll need the seller's name, street address and telephone number to check them out or follow up if there is a problem. Don't do business with sellers who won't provide that information.

• Ask about delivery, returns, warranties and service. Get a definite delivery time and insist that the shipment is insured. Ask about the return policy. If you're buying electronic goods or appliances, find out if there is a warranty and how to get service.

• Be wary of claims about collectibles. Since you can't examine the item or have it appraised until after the sale, you can't assume that claims made about it are valid. Insist on getting a written statement describing the item and its value before you pay.

• Use common sense to guide you. Ask yourself: Is what the seller promises realistic? Is this the best way to buy this item? What is the most I am willing to bid for it?

• Pay the safest way. Requesting cash is a clear sign of fraud. If possible, pay by credit card because you can dispute the charges if the goods are misrepresented or never arrive. Or use an escrow agent, who acts as a go-between to receive the merchandise and forward your payment to the seller. Another option is cash on delivery (COD). Pay by check made out to the seller, not the post office, so you can stop payment if necessary.

• Let the auction site know if you have a problem. Some sites investigate problems like "shills" being used to bid prices up or other abuses of the auction system. They may also want to know about sellers who don't deliver or misrepresent their wares. A bad record may result in a seller being barred from using the site again.

If you have any questions or would like to report and incident, please call NCL's National Fraud Information Center and Internet Fraud Watch at 1-800-876-7060 or use one of our online forms.

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