Friday, December 10, 2010

Avoiding Frauds, Scams and Rip-offs on Ebay

Wherever money is exchanged online, there is someone waiting to rip you off. Shopping websites like eBay have enabled con artists to pull of their heists with ease because of the anonymity that the Internet provides. By hiding behind an online handle, some persuasive text and flashy images, smoke and mirror salesman can trick the unsuspecting into their traps with ease. If you use eBay, you need to be able to spot the warning signs of a scam so that you can shop with confidence and avoid the pit falls of online fraud. Today we reveal the tells of popular eBay scams and show you what to look for to stay safe.

The Buyer Protection Scam

(ebay buyer protection)

The buyer protection scam is a problem that has been affecting inexperienced eBay shoppers. Buyer Protection is intended to be an arbitration system to help eBay contact questionable sellers and refund money to victims of cons, but ignorance of how buyer protection works has led to scammers exploiting the system to rip people off. For example, you might see a deal that looks too good to be true (a vintage Gibson Les Paul guitar for $100.00, for example), causing you to be skeptical of the legitimacy of the sale.

“Don’t worry,” the seller reassures you, “You are protected by Buyer Protection!” Commonly, you will be told that you can send your money to an escrow account, and the seller will send the item so that you can check it out and verify its quality. When you are satisfied, just release the money from escrow to the seller. If not, just send the item back and hold on to your money. It sounds like the ultimate win-win situation, unfortunately this is not the way buyer protection works at all, and when you send your money to the “escrow account,” you can bet it goes straight to the seller’s pocket.

Avoid Purchases Outside Of The Country If Possible

(All Things Distributed)

Since American fraud laws only apply within national boundaries, dealing with sellers outside of the country can be risky business. If you are tricked by one of these con artists, you will have very little recourse, and scammers know this. Even if the sale is supposed to take place in America, check the currency to make sure it’s in USD. Foreign currency is shown in italics, which should be a dead giveaway that something is up.

Be especially wary of a seller who tells you he/she has recently left the country for a few weeks, but can accept overseas payment. This is almost always a tactic to overcome your fears and worry, since you are meant to believe that the person is normally an American citizen. Sending them money carries the very high risk of them running with it, and never sending your product or contacting you again.

Be Cautious Of Second Chance Sales

(Online Work India)

Second chance sales are sometimes used to exploit excited buyers into giving up their account information via a phishing scheme. When you loose an auction, the seller might sometimes invite you to a “second chance sale” - essentially meaning he/she has another one of the items for sale and you can buy it at your final bid if you want. You are then asked to log into eBay through a special list and claim the item if you still want it.

Be careful before you click that link. It could lead to a fake eBay page intended to steal your account information. The unsuspecting bidder might put their user name and password into the log in box, only to have it copied and silently emailed back to the seller. Thankfully this is easy to spot - just hover your mouse over the link in the email and check out where it actually leads. If it goes anywhere that doesn’t start with “https://” ignore it, because the site is unsecured and designed to scam you for your account.

Always Inspect Feedback

(Kings Land and Church of God)

On eBay, there is a tendency to gloss over the feedback for high numbers and conclude the seller must be safe. Dig a little deeper though, and you can uncover some warning signs of dangerous seller:

  • Check for recent sales - Lots of positive feedback but no recent sales could be a sign of a stolen account.

  • Do the sales take place in the same location? If feedback shows a number of past sales in Austin, Texas, but the current one is being held in Jackson Hole, Wyoming, this could be suspicious.

  • Look for over-enthusiasm - Some eBay scammers will create or steal numerous accounts and leave bogus feedback on their own page. You can usually tell by how fantastic the praise sounds. Few buyers would take the time to write paragraphs about how “absolutely amazing and phenomenally reliable” the seller is, and several comments like this should make you suspicious of the authenticity of the feedback.

  • Are payment methods consistent? If the seller has historically accepted PayPal for all past auctions but now demands to be paid by money order, you may be looking at a stolen account

Look The Ad Over Carefully

(Magnifying Glass For Reading)

When analyzing the eBay ad itself, check for giveaways of fraud. Is the The description of the ad original text, or is it ripped from the company website? To check, copy a few sentences and paste them into Google. If the same word-for-word text appears on another website outside of eBay, the seller simply copied it and pasted into the ad, which is not a good sign of trustworthiness.

Also, check the pictures of the item. Are they original photographs taken by the seller, or stolen images from the manufacturer? Sometimes this is obvious, but it’s always worth checking out the company website and Google image directory to look for the same pictures. If the seller stole the photos from another website, it could mean they don’t actually own the item at all and are trying to lure you in for a scam.

About the Author: Sheena Freestone is a freelance writer for FundingUniverse. Funding Universe matches qualified entrepreneurs to banks, investors and other funding sources. Funding Universe helps small businesses avoid scams and rip offs by securing funding from trusted national banks and financial institutions.

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ulfwolf said...

Great post, and excellent advice.

Perhaps I can just add to this that the best way I know to guard against being ripped off by online sales or auctions of any kind, Craigslist and eBay included—and whether seller or buyer—is to use a *bona fide* online escrow company. Especially for pricier items like antiques, jewelry and autos. Although it does add some cost, it takes the uncertainty out of the transaction, and that’s a small price to pay for peace of mind.

For my money, the best bona fide online escrow (and there seems to be ten fraudulent escrow sites for every bona fide one) is probably ( In fact, it’s the only one that eBay recommends, and is the only online escrow company that is licensed to provide escrow services all across the United States.

PS. For more information about avoiding online scams and frauds, go to Online Escrow at (

Anonymous said...

I find it disturbing that a website supposedly dedicated to helping people stretch their money and avoid scams would have advertisements for pay day loans. You should be ashamed of yourself.

Monique said...

I thought about deleting your comment but changed my mind and decided to answer it instead.I'm sorry you feel this way.We do want to help people stretch their dollars, but at the same time, people down on their luck that can't pay the bills or need something paid, may have to turn to this type of source.
My sister is a good example. They have a hard time paying bills because of child support he pays for 3 children and spousal support.They rely on pay day loans alot because they need help.She'd be lost without them she said.
We don't look at it for a source to let's say go play the slot machines- but it's an option for some to help them out in tough times.

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