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Auction & shopping scams

What are online auction & shopping scams?

It is possible to buy almost anything over the internet these days. Unfortunately, scammers can use the anonymous nature of the internet to rip off unsuspecting shoppers.

Scammers can pretend to be selling a product—often very cheaply—just so they can steal your credit card or bank account details. Similarly, they may take your money but send you a faulty or worthless product instead—or even nothing at all.

Most online auction sites put a lot of effort into spotting scammers, which is why scammers will often try to get people to make a deal outside the auction site. They may claim that the winner of an auction that you were bidding in has pulled out, and then offer the item for sale to you. Once they have your money, you will never hear from them again and the auction site will not be able to help you.

Another common trick is for an online auction to be rigged by the scammers. If you are selling a product, the scammer can enter a low bid followed by a very high bid under another name. Just before the auction closes, the high bid will be withdrawn and the scammer’s low bid will win. If you are buying a product, the scammer can arrange for ‘dummy bidders’ to boost the price up.

Other online shopping scams involve the sale of a product —such as a miracle cure or weight loss product—that does not live up to its claims. It can be very difficult to get your money back in these situations, especially if the other party is based overseas.

If you buy or sell online, you should also be aware of cheque overpayment scams.

Warning signs

  • A product is advertised at a very low price.
  • The seller and any initial bidders have a very poor rating on an auction site.
  • The other party wants to complete the sale outside of the auction site (if you do this, you lose any protections that the site operator offer to their users).
  • The other party insists on immediate payment, or payment by electronic funds transfer or a wire service.
  • The online shopping website does not provide adequate information about privacy, terms and conditions of use, dispute resolution or contact details.

Protect yourself from online shopping & auction scams

  • Use your common sense: the offer may be a scam.
  • You can contact your local office of fair trading, ASIC or the ACCC for assistance.
  • Read all the terms and conditions of any offer very carefully: claims of free or very cheap offers often have hidden costs.
  • Make sure that cheques have been cleared by your bank before transferring or wiring any refunds or overpayments back to the sender.
  • Do not open suspicious or unsolicited emails (spam): delete them.
  • Never enter your personal, credit card or online account information on a website that you are not certain is genuine.
  • Never send your personal, credit card or online account details through an email.

As well as following these specific tips, find out how to protect yourself from all sorts of other scams.

Do your homework

Find out exactly who you are dealing with. If it is an Australian company you are in a much better position to sort out the problem if something goes wrong. Make sure you know the full price of the product in Australian dollars (a lot of online shopping prices are quoted in $US), including any delivery charges.

Ask yourself if the claims made about the product are reasonable or just too good to be true. Be suspicious of online shopping websites that do not give their full contact details (physical or street address as well as phone and fax numbers).

Be very careful about paying by credit card and make sure the website used for payments is secure. Look for an unbroken key or lock at the bottom of the browser window, or a web address beginning with ‘https//:’

Also check to see if the website has a refund or returns policy and if so, if its policies sound fair. The better online shopping and auction sites have detailed complaint or dispute handling processes in place in case something goes wrong.

If the auction site uses a feedback rating system, check all the comments about the seller you are considering buying from.

Decide

If you have any doubts about the product in question, or the person selling it, don’t go ahead with the deal. Online shopping and auction scams can cost you money and time in trying to sort out the mess.

If the offer looks genuine (and is not ‘too good to be true’), and the online store or auction service is trustworthy, then you can go ahead with the purchase.

You may want to use an ‘escrow’ service if you are buying something at auction. This is a service that collects the payment from you, and only releases it to the trader or seller when you have confirmed that the product has arrived and is what was paid for. There is usually a small fee for this service. Only use a reputable escrow service (online auction sites may provide a list of recommended providers).

Report them

If you have bought something online and there is a problem, you should first try to contact the trader or auction service. There may be a legitimate reason for the problem. If you are not satisfied with this, and suspect that it may be a scam, you can report it through the SCAMwatch website.

If you have paid by credit card, you may be able to arrange a charge-back through your bank or credit union if there has been some sort of fraud involved. This will effectively reverse the transaction.

You should also warn your family and friends about the suspected scammer.

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What to do if you've been scammed; Scams & the law; Report a scam.

Similar scams:


Scams that send you a fake renewal notice for your actual domain name, or a misleading invoice for a domain name that is very similar to your own.

Spam emails, SMS or MMS usually offer free goods or ‘prizes’, very cheap products or promises of wealth. Responding to spam messages can result problems for you computer and your bank account.

Offers of ‘free’ website access, downloads, holidays, shares or product trials – but you have to supply your credit card or other personal details.

Modem-jacking scams secretly change the phone number dial-up modems use to access the internet to an overseas or premium rate phone number. You could pay hundreds of dollars extra.

Spyware is a type of software that spies on what you do on your computer. Key-loggers record what keys you press on your keyboard. Scammers can use them to steal your online banking passwords or other personal information.

You are sent a cheque for something you have sold, but it is for more than the amount agreed. The scammer hopes you will refund the extra money before you notice that their cheque has bounced.

You are asked to send money upfront for a product or ‘reward’. You will end up with something much less than you expected, or nothing at all.

There are many types of scams that aim to steal your credit card details, either by taking the card itself or by tricking you into giving them the card’s details.

Phishing emails are fake emails usually pretending to be from banks or other financial institutions. They make up some reason for you to give your account details and then use these details to steal your money.

Fake online pharmacies offer drugs and medicines at very cheap prices or without a prescription. They can cause you major health and money problems.

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