At any given time, millions of items are being bought and sold via Internet auction sites. Furniture, clothing, sailboats, golf clubs, even a night on the town with your favorite sports star - all are available to the highest bidder. The companies that facilitate these trades are rich indeed. At last count, eBay had a market value of over $38 billion and craigslist generates well over $100 million in annual revenues.
Of course, most buyers who use online auction sites just want a good deal, and most sellers aren't trying to rip off anyone. But it pays to be vigilant. Protect yourself from online auction fraud by following these four guidelines:
- Read the description carefully. Sometimes sellers misrepresent goods by overstating their value, authenticity, or condition. If the "solid oak nightstand" has "real polished oak veneer," you might want to look elsewhere. If an authentic Selmer Mark VI tenor saxophone (in pristine condition and played by John Coltrane himself) is being offered for a few hundred dollars, something's amiss.
- Check the quotes. Fraudsters sometimes use a valid source, but misrepresent its applicability to the item being sold. They might say that the quoted price on a silver goblet is $1,000, but don't mention that their source is a guide published at the height of the silver market. To determine the market value of an item, review recent closing prices of similar items sold on the same auction site or in your local brick-and-mortar store.
- Pay with a credit card. If a seller requests cash, be suspicious. Using a credit card to buy goods over the Internet provides protection from fraud. Such transactions are traceable and contestable. Other secure options include using an escrow agent for large dollar items or paying cash-on-delivery (COD).
- Plan your meeting with a seller. If using a local selling function, pick up the item with a friend and tell others where you are going. If it is a valuable item, ask for a receipt or bill of sale.
Above all, know how the auction site works - its rules, policies, protections, and disclaimers - before placing your bid.