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eBay Scams Remain A Menace

By Mark Huffman
ConsumerAffairs.com

April 23, 2007

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On Internet auction sites like eBay, "buyer beware" has never been a more relevant warning. Police across the U.S. -- indeed around the world -- continue to arrest eBay scammers, yet the scams continue.

In March a federal grand jury in the District of Columbia indicted a Bulgarian woman on charges stemming from an elaborate eBay scam. According to the indictment, from March to April 2006, the woman advertised merchandise for sale on eBay, including expensive motor vehicles and boats. When the U.S. victims expressed interest in the merchandise, they were contacted directly by an email from a purported seller.

The victims were then instructed to wire transfer payments through "eBay Secure Traders" -- an entity which has no actual affiliation to eBay but was used as a ruse to persuade the victims that they were sending money into a secure escrow account pending delivery and inspection of their purchases.

Instead, the victims' funds were allegedly wired directly into one of several bank accounts in Hungary or Slovakia controlled by the scammer and her co-conspirators.

These scams have been going on for some time. In 2003, Salt Lake City police arrested a 31-year-old man after hundreds of auction winners complained that they sent $1,000 or more to a company named Liquidation Universe for laptop computers they never received. Police say the firm appears to have raked in $1 million from about 1,000 victims in just a few weeks.

In 2004, a California teenager was sentence to three years in jail for defrauding eBay bidders by putting up phony goods for sale. Last year the technology security firm Fortinet warned that scammers were using automated programs, or bots, to create bogus eBay accounts with high trustworthy ratings.

eBay Stays Busy

As for eBay, the company maintains that fraudulent sales make up only a tiny fraction of the millions of listings. Still, eBay says its security department stays busy trying to find phony listings before they ensnare more victims.

Here are some tips for avoiding eBay scams:

• Ask the seller questions about the item for sale before placing a bid. Us the "Ask seller a question" link on the item page.

• Be sure that you understand the seller's refund and return policies before you bid or buy.

• Understand the shipping charges and other details before you bid or buy.

• Choose to insure your item from mail damage or loss if the seller offers this option.

• Verify your seller's contact information, using independent means, before sending payment.

• Make sure your method of payment offers protection. PayPal is the safest way to pay on eBay, and most sellers accept it.

• Never bid on listings where the seller only accepts cash or instant cash wire transfer.

• Avoid unsolicited offers.

• Use caution when considering escrow. It's easy to be deceived by fraudulent escrow services.

• If you receive an email that appears to be from eBay, you can verify its authenticity by forwarding the message to spoof@ebay.com. Within 24 hours, eBay should respond, telling you if the message is fake – which is most likely is.

And probably the best advice of all, when dealing with an online auction site, is "buyer beware."

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