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Hustlers Working Online Auctions

Auction sites are biggest source of fraud complaints on Internet.

By Brian McWilliams, PCWorld   

The NCL%squots Internet Fraud Watch organization released a list of the top ten scams happening on the Internet. Multilevel marketing, work-at-home schemes, and franchise offers made the list. But the number one source of complaints to the NCL was a surprise: More than 25 percent of complaints had to do with Web auctions.

The New York Times recently reported that digital bazaars such as Onsale and eBay represent one of the fastest-growing segments of electronic commerce, with more than $500 million in sales last year that%squots expected to double to $1 billion this year.

According to the National Consumer%squots League, some people who have used online auctions to buy high-price items, computers in particular, have been ripped off. NCL spokesperson Cleo Manuel says it happens because auctions are just a way to bring together individual buyers and sellers. Most transactions are paid for directly with cash or money order, so crooks can easily take you for a ride.

%dquotThat%squots part of the problem with enforcement as well,%dquot says Manuel. %dquotIt%squots just one on one and there%squots not a lot we can do about it. It%squots consumer A sending consumer B something that they bid on at an auction site. It may be a legitimate site, but the payment goes directly to the other consumer.%dquot

According to the Times article, only 27 of nearly 1 million sales conducted at eBay last summer led to complaints involving possible crimes, and online auction houses generally say that fraud is rare and that they take steps to prevent it and to prosecute perpetrators.

But the NCL says Internet users need to be careful when buying merchandise through an online auction, and suggests paying by credit card if possible. In other words, bidder beware.