• PC World
• »Consumer Advice

Xmas Maxon thought she knew the ins and outs of online auctions. In fact, she was a big EBay fan. So when she decided to buy a DVD player last fall, the Web designer and resident of Crested Butte, Colorado, headed to the auction site.

She found a model she liked, with a detailed product description, but there was one drawback: The seller was new to EBay and didn't have a single comment posted in his feedback profile. Maxon wasn't put off, though. "The listing looked very professional, and I was happy to see that the seller accepted PayPal [the payment service]," she recalls.

Maxon submitted a $500 bid, and bingo--the DVD player was hers. Or so she thought. PayPal credited the seller's account for the full amount, but Maxon never received the player. And she wasn't the only one left high and dry. The same seller--supposedly operating out of Michigan--seems to have auctioned off roughly 500 items to about 200 people without ever delivering the goods. Maxon estimates that the scammer made off with over $40,000 in "winning" bids.

EBay promptly suspended the seller from further transactions. Maxon filed complaints directly with the FBI, the Federal Trade Commission, and Michigan's state attorney general's office, but at press time the seller had not been charged with a crime. As far as Maxon and her fellow bidders can tell, he's still at large. "All this guy has to do is reregister at EBay with a new user ID, and he's back in business," says Maxon.

Those 200 online auction bidders in Maxon's case were among thousands of consumers ripped off by con artists on the Internet last year. According to the FTC, Internet-related crime increased in 2000 by over 14 percent; the federal agency received in excess of 18,700 complaints in 1999, and that number jumped to almost 21,400 in 2000.

Internet Fraud Watch, a program of the National Consumers League, also reports an increase in online fraud. "We had a hard time keeping up with the huge volume of complaints last year," says Susan Grant, IFW's director. "It wasn't possible to process every one."

As Internet fraud has ballooned, federal, state, and local law enforcement agencies have stepped up their efforts to combat it. Since the mid-1990s, the FTC alone has won 167 civil suits against 562 con artists. "We're getting better at staying ahead of the curve," says Eric Wenger, an attorney in the FTC's division of marketing practices. "But most of the time, we're dealing with a moving target."

And for all the progress that's been made, bad news continues to pile up. For one thing, reported scam incidents may represent only the tip of the Web fraud iceberg. "Some people are still too embarrassed to come forward and file a complaint--no matter how big or small the cash amount is," says Audri Lanford, coeditor of consumer advice site ScamBusters.

And experts predict that even worse swindles may very well lie ahead of us: "Internet fraud will continue to go up as more new computer users come online--they are the vulnerable ones," suggests Wenger. "Scams have always proliferated on the Web because it's so easy to reach out to millions of consumers. But now, scammers are finding more ways to get money out of them."