Look Before you Click: Five Tips to Help Avoid Auction Fraud YONKERS…

Look Before you Click: Five Tips to Help Avoid Auction Fraud 

YONKERS, New York, April 3 ­ Millions of people around the world buy and sell goods online 
through auction Web sites such as eBay, uBid, eBid, Yahoo! Auctions, Overstock and others. And 
most people transact quite happily. But the fraud potential is high during an online auction, and 
getting the most out of your auction experience requires some advance preparation. 

Consumer Reports WebWatch's "Look Before You Click" campaign, supported by a grant from 
the New York State Attorney General's office, wants to help educate New York State consumers 
about how to avoid online scams, cheats and ripoffs. Online auction fraud is the top Internet 
complaint among New York State consumers, so we'll tackle the topic in three parts: Before, 
during and after the auction. This week we'll focus on the before. In the coming weeks, Consumer 
Reports WebWatch will publish more fact sheets focusing on scams during and after an auction. 

Here's what to keep in mind before you participate in an online auction: 

1. Think of an online auction like a flea market, and an auction Web site as the building in which 
the flea market is happening. If something went wrong with your purchase at a flea market, you 
probably wouldn't go looking for the building manager before trying to settle the matter first with 
the merchant. Online auction sites are venues for transactions, and the majority make detailed 
disclaimers about that. So, the responsibility is on the buyer and the seller to engage in a 
transaction both are happy with. 

2. Winning an auction is like signing a legal contract, binding buyer and seller with some rules. In 
a timely fashion, you should receive the merchandise you paid for, and the buyer should receive 
payment. 

3. Learn something ahead of time about the merchandise you are planning to buy. Comparison 
shop among retail sites. Ask yourself some basic questions before getting involved in an auction: 
Am I OK with a used leather jacket, or do I want a new one? Both new and used goods are 
available on auction sites, from individual sellers to chain retailers. 

4. Consider how you will pay for what you win. Many sellers accept direct payment via a service 
such as PayPal or BidPay. Many buyers won't do business with sellers who don't accept such 
payment services. If a buyer won't accept your preferred method of payment, don't do business 
with that buyer ­ but know this before you get involved in an auction. Read the auction page 
thoroughly. Most sellers spell out clearly towards the bottom of the auction page what types of 
payment they will accept. 

5. Are you buying a bigticket item? You may be tempted to use an escrow service, a third party 
which holds on to your money while you and the seller make an arrangement to inspect the 
goods on offer. The trouble with escrow sites, which have sprung up by the thousands to cater to 
nervous online buyers of bigticket items such as automobiles, is that the vast majority are 
fraudulent, according to the U.S. Federal Trade Commission. In early 2003, about 10 fake escrow 
sites surfaced each month. The rate climbed to 25 a month by 2004. One legitimate service, 
Escrow.com, says it gets reports of six times that number, with many of the bogus sites stealing 
Escrow.com's graphics and logo. (Escrow.com highlights the problem in detail prominently on its 
home page, and links to a purposefully phony site set up by law enforcement agencies and 
industries: www.lookstoogoodtobetrue.com/fraudtypes/escrowfraud.aspx 

Keep up to date on all types of online fraud, and ways to prevent it. Bookmark Consumer Reports 
WebWatch: www.consumerwebwatch.org
About Consumer Reports WebWatch 
Consumer Reports WebWatch is the Internet integrity division of Consumers Union, the nonprofit 
publisher of Consumer Reports Magazine, the Consumer Reports on Health and Money Adviser 
newsletters, BestBuyDrugs.org, and a variety of sites advocating consumer rights in the 
marketplace. We research and investigate Web sites on behalf of consumers, and we advocate 
for consumerfocused Internet policy and governance. Consumer Reports WebWatch accepts no 
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Internet standards the Internet Society, a grassroots group focused on Internet policy and is an 
atlarge structure (ALS) in the user community of ICANN, the Internet Corporation for Assigning 
Names and Numbers. WebWatch also serves as an unpaid special adviser to StopBadware.org, 
a "Neighborhood Watch" initiative led by Harvard University's Berkman Center and the Oxford 
Internet Institute devoted to helping Internet users avoid downloading malicious spyware, adware 
and malware programs. With the Center for Media and Democracy, WebWatch in 2008 launched 
www.frontgroups.org, dedicated to exposing the online work of thirdparty groups that appear to 
represent one agenda while pursuing another.