How do scammers use online auctions and sales to commit fraud?

Scammers frequently exploit online auctions and sales platforms to commit various forms of fraud. These scams can target both buyers and sellers. Here are some common tactics scammers use in online auctions and sales to commit fraud:

1. Fake Listings:

   • Scammers create fictitious listings for products they don't actually possess. They use stolen photos and descriptions to entice buyers. Once a victim pays, the scammer disappears.

2. Overpayment Scams:

   • In this scam, a scammer poses as a buyer, overpays for an item (often with a counterfeit check or money order), and asks the seller to refund the excess amount. The original payment is eventually found to be fraudulent, leaving the seller with a loss.

3. Bid Shielding:

   • Scammers manipulate the bidding process by using multiple accounts. They bid high amounts to intimidate legitimate bidders and then retract their fraudulent bids. This can lead to the scammer winning the auction at a lower price.

4. Phishing Scams:

   • Scammers may send phishing emails or messages that appear to be from a reputable auction or sales platform. These messages ask users to provide personal information or login credentials, which the scammer then uses for identity theft or account takeover.

5. Counterfeit Goods:

   • Some scammers sell counterfeit or fake products, passing them off as genuine. Buyers receive subpar or non-functional items instead of what was advertised.

6. Non-Delivery Scams:

   • Sellers receive payment but never deliver the purchased item. Scammers often use excuses such as shipping delays, lost packages, or customs issues to avoid fulfilling their obligations.

7. Shill Bidding:

   • Scammers employ accomplices or fake accounts to artificially inflate bidding prices, making other bidders think there's high demand for the item. The scammer then wins with a high bid, leaving legitimate bidders with a loss.

8. Escrow Fraud:

   • Scammers suggest using an escrow service for transactions. However, they use a fake escrow service that appears legitimate. The victim sends money, believing it's held in escrow, but the scammer takes the funds and disappears.

9. Identity Theft:

   • Scammers posing as sellers may request personal information, such as Social Security numbers or financial details, to complete a transaction. This information can be used for identity theft or financial fraud.

10. Stolen Goods:

    • Some sellers offer stolen goods at low prices on online platforms. Buyers who purchase these items may face legal consequences when authorities discover the stolen merchandise.

11. Chargeback Scams:

    • Scammers make a purchase with a stolen credit card, receive the item, and then initiate a chargeback with their credit card company, claiming they never received the item or that it was not as described. This results in the seller losing both the item and the payment.

To protect yourself from online auction and sales scams:

• Research the seller or buyer's reputation and history on the platform.
• Use secure payment methods with buyer or seller protection, such as PayPal or credit cards.
• Be skeptical of deals that seem too good to be true.
• Verify the legitimacy of escrow services.
• Never share personal or financial information outside of the platform.
• Use trusted and established online auction and sales platforms.
• Be cautious when dealing with buyers or sellers who avoid in-person meetings or inspections.
• Report suspicious activity to the platform and local authorities.

Staying informed about common scams and practicing caution when buying or selling online can help you avoid falling victim to these fraudulent schemes.