What does shopping and auction fraud involve?
This type of fraud involves the misrepresentation of a product advertised for sale or the non-delivery of purchased products. It can happen, for example, through an internet auction site.
As the popularity of online auctions grows, the number of complaints about transactions has increased. Some of the most common complaints involve:
- Buyers receiving goods late or not at all and sellers not receiving payment
- Buyers receiving less valuable goods or goods that are significantly different to those detailed in the original description
- Failure to disclose relevant information about a product or the terms of sale.
How does shopping and auction fraud affect me?
As a victim of shopping or auction fraud, the most immediate problem is that you have no real prospect of returning the goods or having your money refunded.
After this, there is a risk that your identity details could be compromised. As a result, fraudsters could steal your identity and use it to access your personal finances or obtain goods or finance from alternative sources.
What should I do?
Many problems arising from shopping and auction fraud could be prevented if websites provided better guidance on how to carry out transactions safely. To reduce the risks:
- Make sure you understand how the website’s feedback function works. When available, feedback gives users useful information about recent transactions made by other users
- Check the item's description
- Ask the seller questions
- Read the terms and conditions, including those relating to any dispute resolution procedures the site offers
- If you bid for an item unsuccessfully, do not be tempted to trade off-site if another seller approaches you with a similar item.
As a buyer you should:
- Try to avoid paying by money transfers. They are not secure
- Be careful when using direct banking transactions to pay for goods. Make sure transactions are secure
- Do not send confidential personal or financial information by email
- Use the online payment option, or use a reputable ESCROW account that holds your money in trust until you have received and checked your purchases.
As a seller you should:
- Be wary of accepting payment by cheque. Even though it may clear, you are still liable if the cheque is forged or stolen
- Do not accept a cheque for a higher amount and refund the difference. This is a common criminal cash back fraud that only comes to light when the buyers’ cheque turns out to be stolen or forged.
If the seller has made a direct misrepresentation, you can report the matter to the National Fraud Reporting Centre, which will refer the matter to the police to start an investigation. To assist the investigation, you should keep all evidence of the offence, including goods and correspondence.
However, if there appears to be a business dispute over the nature of the transaction, notify the website involved.
Potential fraud online
Criminals use popular sites like eBay and PayPal to attempt to take money from people.
Below are some guides to keep safe on these sites.
Safe use of eBay and PayPal
- Log into eBay directly from your web browser by typing the address www.ebay.co.uk into your browser address bar, do not use links, email links or shortcuts.
- Ensure your password is secure and is not something that can be guessed easily like your date of birth, your name or something that is common like you favourite football team. Try to use a combination of letters, numbers and symbols that don’t form a word.
- Read the adverts carefully, if it looks too good to be true, it usually is. Where is the item? If it is abroad be cautious. Check the advert carefully for methods of payment, returns policy etc. You may be liable to pay tax on importation if the item is outside the EU.
- Check the history of the seller. Don’t just look at the feedback ratings, read the comments left by previous sellers particularly for a similar item. Check the sellers return policy.
- Ask questions of the seller by using ‘contact seller’ through your eBay account avoid emailing them using your normal mail account.
- Never respond to emails direct to your email account about the item or the winning of any auction. Never follow links from emails. Never respond to emails requesting your log in or personal details. Always log into your eBay account through the URL to confirm you have won. Ebay will never email you offering a ‘second chance offer’. Always log into your account and go to ‘my eBay’ to check for these.
- Use PayPal when paying for an item, it is secure, you have cover if the item doesn’t turn up or is not as described up to the full purchase price including delivery and it costs the buyer nothing.
- Avoid using any money transfer service such as Moneygram and Western Union to pay for purchases. They are completely untraceable and are not secure.
- Unless you have actually purchased the item from abroad do not send money abroad to pay for an item you have bought.
- Report all suspicious transactions, emails etc to eBay/PayPal. Check their websites for their Security Centre where there are loads of tips for staying safe online.