Online Auctions: Buyer Beware!

DCU's vision is that all members achieve financial well-being. We believe that unbiased, detailed consumer education is essential for you to achieve your financial goals. Why are we different? Read it here.

By Will from Holland

Online auctions are wildly popular these days, especially with students either looking to raise cash or looking to buy cheaply. The sites are very successful, too. Right now, for instance, over six million items are for sale on eBay alone.

Auction sites are free enterprise at its wildest: They allow any of us to parade an item before the world for virtually no cost, but they also allow scam artists to quickly take advantage of unwary buyers and sellers. Fraud complaints against online auction sites now make up nearly fifty percent of the complaints filed at the FBI’s Fraud Complaint Center—and most people don’t file complaints.

So, should you avoid buying or selling online? No. But learn how to do it safely. Here’s how:

• Slow down!
• Study the auction site. No two online sites are the same. Lots of sites don’t verify or guarantee anything. Avoid them.
• Before bidding, check out the site’s feedback forum. Pay attention to the feedback.
• Don’t buy items from people who won’t give you a valid phone number. Call the number to confirm it’s real.
• Know the stuff you want to buy. Do price comparisons of auction items with new or refurbished items at manufacturer sites for the same products.
• Pay by credit card. Cards generally give you some protection, if you have problems with your purchase.
• Never give out your personal information. Some scam sites ask for your social security number and other important numbers before dealing with you. If you’re using PayPal or other payment plans remember that these sites are subject to huge amounts of scamming. So, be careful.
• If you’re selling an item, watch out for scammers trying to ‘overpay you.’ They want you to send the change back to them. Forget it! This is a major popular scam now.
• Keep precise records of all transactions.
• If you get scammed, report it to police and to the management of the auction site.

Also make sure you do some online homework. Here are two of the best information sites on Online Auctions:

• Scambusters.com
• National Consumer League

Make sense? Read more about issues like this in our other articles and be sure to give us your feedback.

Cheers, Will