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15 Ways to Avoid Fraud on eBay

by trevor. Average Reading Time: almost 8 minutes.

Fraud is a growing problem on eBay.  The golden rule here is to apply common sense.  However, some of the tactics used can be pretty convencing, especially to the novice user. 

REMEMBER: IF SOMETHING SEEMS TO GOOD TO BE TRUE IT PROBABLY IS!  I would also recommend a visit to eBay’s safety centre

1 Don’t depend on Feedback.

Whilst Feedback is a good indicators of a seller honesty, it is possible to fake feedback by having multiple IDs, and IDs can be stolen.  Buying very cheap information only products is also a very quick way of building feedback, without doing any real trading.

2 Fake eBay webpages

Fake websites are easy to create and will often look just like the real thing. If you clicked a link in an email to reach the website, check that the web address is the same as the one shown in the mail. Never trust a website that doesn’t have ebay.com or ebay.co.uk immediately before the first single forward slash. A real eBay address is http://pages.ebay.co.uk/ and a bogus site would be http://signin.ebay.co.uk-kzan@12.45.4.4/.

eBay provides a tool for detecting bogus websites in the eBay Toolbar called the Account Guard. The Account Guard turns green when you are on a genuine eBay or PayPal site and turns red if you are on a suspect site.

3 Stay inside eBay

Frequently both seller and buyers will approach other users directly and suggest a private deal away from eBay’s commission fees.  As a seller it is very tempting to take them up on the offer as it avoid eBay’s commission fees, and buyers avoid the chance of loosing the auction.

However, trades outside eBay are not subject to any of the protection of the eBay marketplace and if something goes wrong there is little than can be done.  It is also a good idea to always pay with PayPal as it provides a level of payment protection.

4 Shill Bidding

Shill bidding is common on eBay and means bidding on your own items, either through a second ID or via a friend, in order to artificially raise their final value. Shill bidding is illegal in the UK.  Here are some ways of spotting a shill bidder if you suspect foul play:

  • Examine Feedback Carefully. Shill bidders may bid exclusively on items offered by one seller. If a bidder has a long history of buying from one seller, it is quite possible they are in cahoots. (that said, at Auctioning4u we did have one seller who bought exclusively from us)
  • Be suspicious of zero feedback.  Buyers should be wary of seller with zero feedback under all circumstances
  • Suspiciously quick feedback. Be alert if their feedback was left by a satisfied buyer within hours of an auction ending, before the item could possibly have been delivered.
  • Feedback from no longer registered users.  This is always something to be wary of, whether looking for shill bidders or vetting a seller before making a bid.
  • Retracted bids. If a bidder has retracted lots of bids, especially from the same seller, this could be a sign that shill bidding is a foot.

If you are suspicious of any behaviour on eBay it can be reported using the Report this item link at the bottom of every listing page

5 ‘Phishing’ or ‘Spoof’ emails

Most people get several bogus emails preporting to be from eBay or PayPal every day most of which will be sent by frausters intent on extracting confidential information such as your PayPal login details. Delete any emails sent under the following circumstances:

  • If you get an email from eBay or PayPal, informing you that a bid you know nothing about has been successful.
  • Any requests from eBay or PayPal for your password, account details, or personal information.

Phishing emails usually have some of the following characteristics

  • They will not be addressed to you, but usually start with a generic "Dear eBay member".
  • They have an urgent tone, eg "Account Suspension – Urgent Auction Required".
  • They have links to web pages that look like eBay pages but are not the real thing (see below).
  • They ask for confidential information such as your paypal password or credit card numbers.

Remember: eBay will never ask people to provide account numbers, passwords or confidential information via email. Any genuine emails from eBay will be in the My Messages box in My eBay. If you are in doubt don’t click on any links from a email.

A quick way to identify bogus emails is to hover your mouse cursor over a link which will display the link’s destination.  If it is not the same as the links which is show in the email, do not click it.

6 Avoid Use Instant Money Transfer services

Money transfer services such as Western Union are designed for people who trust each other to transfer money from one place to and are not intended to carry out transactions between strangers.  Once a transaction has been made the money is untraceable.  For this reason eBay has banned the use of Western union on its site.

7 Fake Goods

Unfortunately the sale of fake goods is common on eBay and so it is important to exercise caution when buying designer items such as Louis Vuitton, Channel and Paul Smith etc.  It can be very difficult to spot fakes, but if something seems too good to be true it probably is.  If you must buy these kinds of items on eBay always check a seller’s feedback.  It is also safter to buy from business sellers.

8 Items that don’t exist

If a seller is peddling a non existant item often there will be no photograph, or a photography clearly lifted from elsewhere on the internet.  If you are at all doubtful, ask to see a photo and get more information.  Once again, checking feedback is important.

9 Excessive postage

eBay allows sellers to set their own postage.  Whilst most give reasonable postage rates some sellers use excessive postage and packaging to increase their profits.  Always check the postage cost of an items and compare with similar items.

10 Check your PayPal Account for Payments

Once you get a payment for a sale through PayPal, you will get an email telling you that the payment has gone through to your account. Fraudsters can send out fake emails telling you that you have been paid in the hope that you will send the goods without checking. Always check your PayPal account to make sure the funds have arrived before sending out the goods.

11 Second Chance Offer Fraud

Second Chance Offer emails are sent, via eBay, by sellers to unsuccessful bidders if they have additional items to sell or the winner fails to pay.  Always check that it has come from a seller you have been dealing with for something you have previously bid on. Fraudsters use bogus Second Chance Offer to get people to send payments to them as opposed to the legitimate seller for items that do not exist, or as a way to get hold of personal data. If in doubt, view your emails in My eBay.

12 Don’t assume eBay is the cheapest  

eBay is not always the cheapest place to make a purchase. Sometimes sellers are trying their luck and so always check prices first on a shopping comparison engine like Kelkoo, Shopping.com and Pricerunner.

13 Don’t buy information only products

Some sellers try to sell lists or links to information which is usually available elsewhere for free. Avoid like the plague.

14 Read the description carefully

When buying items on eBay it is very easy to read things into the description, bidding on what you want, and not what is described.  Sometimes the seller is actually selling the box that an item was sold in and trying to pass this off as the real thing. Always read the whole description in detail before bidding.

15 Know your rights.

If you use the ‘Buy It Now’ button, rather than a standard auction, to buy from a UK based trader on eBay, you have all the same statutory rights as buying from a shop.  If you make a purchase on eBay from a business seller, this means that you have at least a 7 day cooling off period when the item can be returned for any reason.

When buying from an individual the usual rule is Caveat Emptor – buyer beware.  Providing your purchase arrives as described there’s little legal comeback and the standard seven day internet cooling-off period usually doesn’t apply to auction purchases.

16 Beware of Strange Requests (I know there are only 15 in the title, but I though of another one!)

Always be suspicious of people who ask for things out of the ordinary such as overpaying for an item and then getting a refund, or posting to another country from the one given as the user home country.  Trust your judgement, if something seems a little odd there is probably something fishing going on

This is good advice for life in general as well as eBay trading.

11 comments on ‘15 Ways to Avoid Fraud on eBay’

  1. “Fraud is a growing problem on eBay.”

    Can you substantiate that? *growing*?

  2. trevor says:

    Not really I am afraid, I think that I was feeling melodramatic at the time. I do think that with eBay now as more of a established business, that the shine has gone off it and people are paying more attention to its faults.

    So perhaps there is not more fraud, but people are just talking about it more

  3. Mark Kenny says:

    As a seller, one way to cut down on fraud attempts is to either use immediate payment required, if your using a Buy It Now format, or impose a pre-approved bidders list on your listing. This will give you the chance to look into potential members before they can bid on your item.

    Neither are perfect, but “every little helps”

    Mark

  4. Mike Searles says:

    Also seller-specific, is eBay’s “Blocked Bidder” list feature. While it’s after-the-fact, it does protect you automatically from ever having to deal with fraudsters and shill bidders again. Some eBay groups even “share” the ID’s of bidders who’ve caused problems, allowing the community at large to “police itself.” While this method may seem draconian, I still believe that the group has more collective muscle to flex than eBay’s Trust & Safety team, and it’s up to that group to fight those members who impinge on the market’s legitimacy.

    … man, talk about melodramatic, Trevor!…

  5. Justin Meats says:

    Consumer Reports July 2007 issue stated that almost half of eBay buyers surveyed by the Consumer Reports National Research Center said they’d encountered deceptions on eBay.

    http://www.consumerreports.org/cro/money/shopping/shopping-tips/ebay-8-07/overview/0708_ebay_ov_1.htm

  6. peter says:

    Thank you for your good idea, I post it for more ebayers in china at http://bbs.fobshanghai.com/thread-833705-1-1.html

    if you don’t agree, please let me know it.

  7. Will White says:

    This service, Auction Errol helps to find fraud on eBay!

    http://www.auctionerrol.com

  8. Bob Orr says:

    As an EBay Power Seller, I really like all of the tips you gave here, except one. I sometimes raise the shipping values asked on my auctions, too, like many other Power Sellers I know. However, we don’t do it to raise our profit levels on a per item basis, as you suggested here. Instead, we do it to keep our LIST and FINAL VALUE fees paid to EBay lower, and are thus able to lower our TOTAL asking values for what we sell. The BEST advise you can give people in this area is to compare the TOTAL charges somebody is asking for something, to the TOTAL charges somebody else is asking for the same thing listed on EBay or elsewhere. If the TOTAL value for something listed by a credible seller is lower than everyone else’s TOTAL asking values, then you can purchase it safely, and save money at the same time. So, please be careful about how you caution people on THIS one. It’s EBay who is losing money when LIST values are lowered, and shipping values are raised, because sellers don’t pay EBay fees on shipping values asked in auctions and, in most cases I’ve seen, these same sellers are then able to lower what they ask in TOTAL charges for what they sell.

  9. towbar says:

    You forgot to mention sellers whose customers find that clicking pay now instantly links their computer to channel advisor .com which downloads their personal purchase and paypal data to sell on to others.

  10. LED TVs says:

    Thanks for taking time to collate all this useful information into an easy to understand eBay shopping guide.

  11. JULIE says:

    DO NOT USE CHINESE SELLERS THEIR GOODS ARE FAKE 99% OF TIME. IF THEY EVER ARRIVE THAT IS.

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