Avoiding Online Auction Scams and Frauds

Avoiding Auction Scams and Fraud
12 Dec 2006 (updated 5-24-08)

On-Line auctions are a marvelous resource for collectors.

Back in the dark days when we first started collecting Olympic pins, we had to obtain mailing lists of other collectors, write to them, ask what they had for trade, and send photo copies of what we had ourselves. Airmail letters were costly, responses took weeks or never came at all, and sometimes, by the time we thought we had worked out a trade, the other collector had already traded the pins we had expressed interest in.

Then the internet came along, and revolutionized collecting. We were able to post on forums and  conduct trades within (literally) minutes, via email, and should a trade go bad, the forums policed themselves. The internet was a godsend to us.

On-line auctions came on the scene in the late 1990's and notched collecting up another step, essentially becoming a searchable shopping center for collectables of all types, complete with photos, and establishing and stabilizing the values by the simple caveat of what collectors were willing to pay.

But, with convenience and choice came scams and problem sellers.

This article is an attempt to help you avoid the mistakes I have made over the past ten years as a member of several auction sites.

FEEDBACK

First and foremost....check your sellers feedback. I cannot preach this enough. People think a seller with 90 or 95%, even 98% feedback must be good. That means 98 out of a hundred buyers were OK with the seller? Right? Not necessarily. 

The simple truth is, most people in the past have been reluctant to leave negative feedbacks because they were too worried about retaliatory feedback.

Ebay, the largest online auction site, changed their feedback system in May 2008, so that sellers can no longer leave feedback. In addition, they made it difficult for buyers to see an ID's history beyond twelve months. An unscrupulous seller could run an ID into the ground, put it on ice for a year, and come back with what appears to be excellent feedback.

Your best bet is to go to www.toolhaus.org to run a complete history on the ID you are considering buying from.

Now there are exceptions. If someone only has a dozen, a hundred feedbacks one negative makes a big impact.,If that one negative was from someone who plainly had a bad attitude, I'll place a bid, but only if it's an inexpensive item, and only if the original buyer/seller hadn't made it a point to exchange nasty, rude feedback. You may think it is silly, but I make it a habit to read "feedback left" by a seller before I place bids on their items. I find that people who leave rude feedback, retaliatory feedback, or just plain whacko feedback tend to be problem sellers, and pack poorly.

I also look at the number of neutrals a seller has received. Most people are just too darned nice to leave negatives, but are more willing to leave neutrals. So if I see a seller who has as many neutrals (or more) than he has negatives, that is also a red flag. Read the feedback. When you see the neutrals, check and see what corresponding feedback the other party left. If he left a negative, with a nasty comment, shop elsewhere.

Remember, there is almost always a similar item for sale by another seller. Isn't it worth paying a few cents more to be sure you're going to get it, and not have to deal with someone with a bad attitude? Just move on to the next auction!

Finally, regardless of what auction site you use, please be sure to leave feedback, whether it's good or bad. How can you or I know how reliable an auction site user is if other users don't leave feedback? I have left almost 11,000 feedback over the years, yet have only received only about 9,500. That's over 15% of people I've dealt with that I'll never know if they were happy, upset, or just blah about the whole exchange.

POSTAGE

Postage costs have become a major on-line auction issue. As auction fees, particularly Ebay fees, skyrocket, unscrupulous sellers try to find a way to evade fees, and postage is the easiest way to do so.

Most auction sites charge both a listing fee (whether an item sells or not) and a "final value fee", which is a commission based on the final sale price of the item. Sellers can evade fees by artificially lowering the price of the item. For example, many sellers now list items at $.01 cent, but charge astronomical postage fees. So, they save money by paying the commission based only on the one cent value.

You may think you are getting a good deal, but consider......if you buy an item for a penny and pay $19.99 postage, if that item arrives broken (or not at all), when you complain to the seller or Paypal, they refund you the cost of the item. One cent. Not such a good deal now, is it? And you can bet, a seller that would be that anxious to defraud the auction site will have no qualms about doing the same to you. Plus, the net result is yet more fee increases, which are passed along to the reliable sellers.

When looking at an item, always look at the postage cost. Make sure the postage costs are reasonable, and what you are willing to pay. If the seller does not clearly state postage, email them and ask them for a postage quote (and save the email!)

Remember, too, postage does not mean exact postage. Sellers are permitted to charge a "reasonable" handling fee. Only you can determine what is reasonable to you. Don't bid, and then try to negotiate the seller down after the fact. Do take into account that sellers have to pay for packing materials, Paypal fees, and actual postage. When I pack something myself, I generally pack it in special bags, taped to sheets of cardboard, inside of stiffy envelopes. It can easily take me half an hour to pack a single parcel. Tape, bags, envelopes, even rubber stamps, they all cost money. Some packages (insured, international) can't just be dropped in the corner box, and require time-consuming special trips to the Post Office. Paypal charges in the range of 3 to 5%, depending on if you pay from your bank account or credit card, and if there is any currency conversion involved. You will find that many sellers now offer discounts if you pay via check or money order.

My personal rule of thumb is, if a seller is outrageous on postage, he's going to be outrageous in other ways, and I just don't care to deal with them.

Please remember, do be fair to your seller. If you buy something on Saturday night, there's just no way it's going to be in your hands on Monday morning. Or Tuesday, or probably even Wednesday for that matter.One of my own buyers paid for something on a Saturday afternoon, and by Monday afternoon was sending me complaints she hadn't received it. 

When buying something from a seller in Taiwan or any other distant country, please allow ample time for a package to reach you, including time for it to clear Customs. Because of 9/11, packages can occasionally (rarely, though) get tied up for weeks and even months in Customs or Air Security warehouses. I had a package of newspaper clippings get tied up in Los Angeles for six months one time!

Also, be aware, most countries have discontinued the old economy or surface mail rates, so postage on heavy, large, bulky, or oddly shaped items from overseas can be costly.

SHILL BIDDERS

Unfortunately, Shill Happens. When it happens to you, it's not pleasant.

Shill bidders are auction users that have more than one ID. They will list an item for sale, and use the other ID to run the price up, taking advantage of unsuspecting bidders.

You cannot know for certain if an item is being shilled, but there are some pretty clear indicators to steer clear of an auction. These are general rules for most auctions sites, although Ebay has instituted a policy of hidding Bidder IDs until an auction is closed, which has proved to be a field day for shill bidders.

  • If the price on an item you are bidding on goes up in dollar increments, that's usually a sign (but not always-my daddy bids in dollar increments, bless his heart)
  • If you have placed a reserve, and a bidder has progressively inched the price up til the reserve is met
  • A bidder runs the price up and then retracts his bid when other bidders enter the fray, leaving the burden on the last bidder
  • A bidder has a history of retractions. I saw one yesterday that had total feedback of 21, but had 78 retractions on his ID. That wasn't just a red flag. That was a "hit me on the head with a great big stick".
  • The seller has "selling only" feedback, and the most active bidder has "buying only" feedback.
  • You do a search of "items bid on" by a bidder, and he has ONLY bid on this seller's items in the past 30 days
  • Bidder and seller seem to be based in the same city
  • The seller is idiot enough to email you using one of the competing bidders' IDs (and this has happened to a good friend of mine)
  • The bidder's VERY first feedback is from that same seller
  • In one of my favorite cases, the bidder had previously only bought lingerie, and was suddenly running up the price on a LOTR press kit. I tracked this buyer & seller for six months, and the bidder bid in every single one of the sellers LOTR auctions, and won about 60% of them, but they had never once exchanged feedback
  • The two IDs are very similar. For example ID Collector1 is selling, and some ninny named Collector2 is bidding. Duh! But I've seen it happen.

       

On the flip side, be aware that if you are dealing with a small circle of collectors, they may frequently buy and sell from each other, without any intent to shill. (See my blog page about The Saga of the Box!) In the field of Lord of the Rings collecting, I can easily tell you a couple of dozen sellers I've both bought from and sold to myself. I have also been lucky enough to deal with lovely collectors who have bought from me over, and over, and over again. You will see that with many reliable sellers.

A great resource for checking inter-related potential shillers is the tools page at www.goofbay.com

If you see shill bidding going on, you can report it to Ebay, but don't count on them doing anything about it these days. They will insist that their anti-shill software is preventing this from happening.

DAMAGED ITEMS

The worst has happened, and you've received a damaged item. SAVE YOUR PACKING MATERIALS.

If the item was insured by the USPS, contact your seller, and tell them you need to file an insurance claim, because you may need their assistance. Take the item to your local USPO, and show the item and the packing material to the clerk. They will give you the form you need to fill out, and will walk you through completing the claim.

If it was a UPS shipment, contact UPS. They will take a claim over the phone, and will also walk you through the process.

Some sellers insure through  services such as Auctiva, Endicia, and others. Just because there is no insurance sticker on the parcel does not necessarily mean it is uninsured. If your auction had the words "Auctiva" at the bottom, and you paid an insurance fee, there is a good chance it was insured on Auctiva. You will need to contact your seller for Auctiva insured items.

Even if it is not insured, contact your seller, and send photos of the damage if possible. Some sellers will bend over backwards to help .

If not, and it was a Paypal payment, you may still get some help from Paypal, if you file a Paypal complaint. Paypal is so darned iffy these days, it's hard to tell, but do go through the motions.

Whatever happens, leave your seller appropriate feedback. No package is immune from postal sorting equipment, and even the best packaging can get squashed, stepped on, or , as happened to me, run over by the mail truck. Sellers can't help that, but they should be responsible for helping you to be reimbursed on insured items. If they were helpful, leave 'em a positive, and let the world know how helpful they were. If they were unresponsive or (heaven forbid) didn't insure when you paid for insurance, leave the well-deserved negative and warn the next potential buyer away from that person.

FRAUD

Well, this is a little outside my ken, since I have never (knowingly!) committed fraud. Hopefully, if you've followed the instructions above, you will not be at this point.

If an item does not arrive at all, and you paid via Paypal, file a complaint. You have only a limited time to do so, and some sellers will deliberately drag their feet to trick people into exceeding the time limit. Be sure you do all your emailing through Ebay, so there is a record "within" Ebay that you have attempted contact with the seller.

If the item arrives, but is not what you ordered, contact your seller. Most sellers will fix the problem, although they may or may not ask you to return the one you got. Now, if you were buying a PS3, and got a box full of rocks, then you have an issue for the police. This generally doesn't happen within the LOTR collecting realm, though.

If you paid for your item via credit card on Paypal (and not through your Paypal balance or bank draft), also contact your credit card company. Supposedly, that's outside the realm of your Paypal agreement and may cause them to get their knickers in a twist, but you do generally have some rights there, too.

DO NOT PAY FOR YOUR ITEMS VIA WESTERN UNION. PERIOD. NADA. NEVER. NYET. DON'T DO IT.

Do not accept a cashier's check or money order for substantially more than an item costs, and "refund" your buyer the overpayment. In fact, question any cashier's check or money order, particularly if it is a large one. 

Never, ever, ever, ever EVER log on to Ebay or Paypal via any email you receive.  Open a new browser window, log in to your Ebay account, and pay within Ebay. There are too many scammers sending fake emails soliciting payments, or (the newest scam) fake "Second Chance Offers". If someone has sent you a legitimate Second Chance Offer, it will be visible in your Ebay messages. Do NOT accept an SCO via email.

Any email you get with an Ebay logo on it should be visible on your Ebay "My Messages" screen. If it is not, it is a FAKE. Even if it has your ID or is personally addressed to you, it is FAKE. There are people who specialize in harvesting Ebay IDs with associate names/email addresses, and selling these to Nigerian/Russian/Chinese/probably American scammers.

OTHER SOURCES and GENERAL STUFF

You know, call me petty or call me elitist, but if your auction description is written like a teenager did it, or contains blatant misspellings, or poor English, I figure UR2 dumb 2 list, and probably 2 stoopid 2 ship 2 me properly, dude. I will not bid on poorly written auctions just on general principle.

www.toolhaus.org

www.goofbay.com

The Ebay Trust & Safety Forum.   People here will be glad to help answer polite questions.