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There’s no way to measure what percentage of eBay auction items that are being sold are fraudulent, or what percentage of eBay buyers have no intention of actually paying for the item, but the sheer number of attempts to fraud honest eBay members is most certainly a growing problem. You can protect yourself from eBay fraud by following these tips:

What Protection Do You Have on eBay?

Before putting an item up for auction or bidding on any auction item on any auction site, make sure you understand how the auction works, and what the obligations and rights you have as a buyer and a seller. Make yourself familiar with the fraud protection that the auction sites offer. eBay offers a buyer protection service for $25.00 which will pay you up to $200 for items that you win and never receive, or that you do receive and have been misrepresented. Unfortunately, this doesn’t cover high-ticket items.

Research the Item You’re Bidding On

When you bid on an auction site, that doesn’t necessarily mean you’re getting the best deal. Always make sure you know exactly what you’re bidding on, and make sure that you can’t get the same item at Wal-Mart or an online retailer for less money.

Bid Cautiously

Before bidding on an item, ask any questions that you have about the item that you don’t know the answer to. Make sure the item has some good photos, and that there’s a solid description of what you’re getting. If the item is being sold “as is”, it’s likely to be broken when it arrives. Make sure the seller has had a very positive feedback rating (at least 98% positive). Get the contact information of the seller and their physical address, and verify them by calling and seeing if they gave you their real information. It’s probably best to bid on items only from people in your country so that you have a better chance to go after them if there’s a problem with the auction.

When You’re Selling Items on eBay

It might be best to accept money by PayPal only. Often times cashier’s checks, personal checks, and money orders that you receive are fraudulent. The bank may even cash them and say they’re good, even when they are fake! You might not know it’s a bad check until months later. If you do receive money by PayPal, login to your account and make sure the money’s actually there. Sometimes fraudsters will send a fake email that looks like it’s from PayPal purporting that a payment has been sent. It’s probably also a good idea only to allow bidders from your country of origin so that the item isn’t half-way around the world and you have no recourse if a problem arises.

When Paying for the Auction You Won with a Credit Card

If you have the option to, use PayPal to pay if you’re going to use your credit cards. If you deal directly with the merchant and give them you’re number, they’ve got it as long as your card is good. You certainly don’t want them to have your credit card number if you have no idea who the seller is. The down-side of using PayPal is that you waive your rights to issue a chargeback, which also puts you out of luck if the seller fails to send the merchandise.

Consider an Escrow Service for your eBay purchases

If you’re bidding on a rather large item, say more than $1000, use an escrow service. An Escrow Service is an intermediary which will hold your payment until you have received the item, and then after you are satisfied with it, release those funds to the seller. Don’t let the other party suggest an escrow service that you’ve never heard of before, likely it’s a scam for them to take your money. Instead use a reputable escrow service such as Escrow.com and SafeFunds.com that are well established. You can look at Escrow-Fraud.com for a list of fraudulent escrow services. You’ll pay a small fee to use the escrow service, but it’s well worth it.

If a Problem Arises

First, try resolving the issue with the seller (or buyer). If you can’t resolve the dispute, then contact the auction site and your credit card company. Finally, if those two avenues don’t work, make a report to the FTC and the Internet Crime Complaint Center.

See also:
Want to Make a Lot of Money and Be Successful on eBay? Say NO to Drop Shipping!

[via financeispersonal.com]