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How do I protect myself when buying something at an on-line auction?

Posted By : of Data Doctors on October 5, 1999

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How do I protect myself when buying something at an on-line auction?

This question was answered on October 5, 1999. Much of the information contained herein may have changed since posting.


The Federal Trade Commission has recorded more than 6,000 complaints of online auction fraud this year -- a twentyfold increase over last year Most of the complaints deal with non-delivery of the product that was purchased via the auction.

Here are some tips from the Internet Fraud Watch web site:

-Understand how the auction works Many online auctions simply list items that people want to sell They don't verify if the merchandise actually exists or is described accurately

-Check out the seller For company information, contact the state or local consumer protection agency and Better Business Bureau where you live and also where the company is located Look at the auction site's feedback section for comments about the seller Be aware that glowing reports could be "planted" by the seller, and that a clean complaint record doesn't guaranty that someone is legitimate

-Be especially careful if the seller is a private individual Most consumer protection laws and government agencies that enforce them don't deal with private sales, so if you have a problem, it could be impossible to resolve

-Get a physical address and other identifying information You'll need the seller's name, street address and telephone number to check them out or follow up if there is a problem Don't do business with sellers who won't provide that information

-Ask about delivery, returns, warranties and service Get a definite delivery time and insist that the shipment is insured Ask about the return policy If you're buying electronic goods or appliances, find out if there is a warranty and how to get service

-Be wary of claims about collectibles Since you can't examine the item or have it appraised until after the sale, you can't assume that claims made about it are valid Insist on getting a written statement describing the item and its value before you pay

-Use common sense to guide you Ask yourself: Is what the seller promises realistic? Is this the best way to buy this item? What is the most I am willing to bid for it?

-Pay the safest way Requesting cash is a clear sign of fraud If possible, pay by credit card because you can dispute the charges if the goods are misrepresented or never arrive Or use an escrow agent, who acts as a go-between to receive the merchandise and forward your payment to the seller Another option is cash on delivery (COD) Pay by check made out to the seller, not the post office, so you can stop payment if necessary

-Let the auction site know if you have a problem Some sites investigate problems like "shills"e; being used to bid prices up or other abuses of the auction system They may also want to know about sellers who don't deliver or misrepresent their wares A bad record may result in a seller being barred from using the site again

The Federal Trade Commission has these tips for on-line auctions:

-Try to pay by credit card If you don’t get the merchandise, you can challenge the charges with your credit card issuer.

-Ask about using an escrow agent, or paying by COD Be aware that most escrow services charge a fee.

-Verify the seller’s identity If you can’t, consider this a red flag and avoid doing business with the seller Some sellers may use a forged e-mail header, making it impossible to contact them if you need to.

-Ask how you’ll get follow up service, if you need it Many sellers don’t have the expertise or facilities to provide service for the goods they sell Is this important to you?

-Avoid impulse bids and purchases Online auctions may be enticing, but are you really getting the best price?

-Ask about return policies Returning merchandise to an online seller may be difficult.

You can file a complaint with the FTC by contacting the Consumer Response Center by phone: toll-free 1-877-FTC-HELP (382-4357); TDD: 202-326-2502; by mail: Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Ave, NW, Washington, DC 20580; or through the Internet, using the online complaint form Although the Commission cannot resolve individual problems for consumers, it can act against a company if it sees a pattern of possible law violations

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Posted by of Data Doctors on October 5, 1999

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