One of the fastest growing segments of electronic commerce is Internet auction sites. Each year millions of computer users bid on and buy products worth billions in sales. And while most of these transactions are completed safely, online auctions are also the leading source of Internet scams, accounting for 48 percent of all online fraud, according to recent FBI figures. So take several precautions before bidding online.
First, be sure you know the sites reputation and how its auction works. Read its rules and regulations. Use no site that wont divulge its street address (not a post office box) and phone number you’ll need this information to seek justice if you are wronged. And use a third-party rating system such as that found at www.gomez.com to get information regarding the integrity of the site.
Check out the seller as much as possible. The Better Business Bureau can inform you if anyone has filed a claim against the company. If the seller is an individual, use only sites that include a feedback section where previous customers can report their interaction with the seller. This is not a flawless system, however, because dishonest merchants can pad their own profiles with false praise.
Be especially skeptical of claims about collectibles. Insist on written appraisals and verifications where appropriate. One of the most common ways people get cheated in online auctions is by believing fraudulent claims about authenticity, history, or value of unseen items from unknown sellers.
Understand the product and the terms associated with it. Does the price include shipping, warranties, and a money-back guarantee? How long will it take to arrive? If the description doesn’t answer all your questions, phone or email the seller before bidding.
Buy only from sites that offer a secure, encrypted transmission process for your credit card. If possible, pay by using an online escrow service that pays the seller only after the buyer has inspected the purchased item and deemed it acceptable. Fees are 2 percent to 10 percent of the transaction amount and can be paid by either party.
Keep a paper trail. Retain copies of the item listing and all email. You’ll need this if you have to prove you were cheated. And report scams to the site immediately. Some sites cover losses up to a given amount, so investigate your options if you feel you’ve been taken.
Finally, use common sense. If a deal seems too good to be true or a seller smells fishy, its not worth the risk.
With these tips in mind, your online auction experience should be both profitable and safe.