An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the winning bidder. In economic theory, an auction may refer to any mechanism or set of trading rules for exchange. Any item that needs liquidation or a quick sale can be disposed rapidly by auction. They offer trading opportunities for both buyers and sellers that are not available in conventional channels and they ensure cautious execution of contracts.

The numbers of internet auction fraud is growing rapidly, as online shopping has grown significantly every. Most internet auction fraud cases involve straightforward scams where consumers allegedly win merchandise by being the highest bidder. All sounds good until they send the payment and never receive the merchandise. However, people can lower their risk by knowing what auction fraud is, and how to prevent falling for it.

Stated below are some tips on keeping your risk at a minimum when purchasing items from an online auction website.

• Become familiar with the auction website. Before you bid for any product online, look into the websites protection policies. Never assume you are protected from auction fraud.

• Before placing a bid, learn as much as you can about the seller. If you can’t find anything out about the seller, than avoid doing business with them. Never fall for promises of better deals by moving away from the original auction website.

• If the seller wants you to use an escrow service you’ve never heard of, look into it. You may check out the website or call up customer support. Contact them to digg up data on the business in question. If you can’t confirm the legitimacy, don’t use it.

• Never ever give out your social security number, driver’s license number, credit card number, or bank account information, until you have thoroughly checked out the seller and the escrow service.

• Always save 100% of the transaction information.

• If after the sale you feel the item/payment should have been delivered already, try to work it out with the seller/buyer. If at that point you feel that fraud is involved, immediately contact your state attorney general’s office.

References

http://www.crimcheck.com/background-check-news/whats-internet-auction-fraud-and-how-do-i-prevent-it

http://amazingcommerce.wordpress.com/2008/06/26/things-to-take-note-to-prevent-e-auction-fraud-when-a-consumer-participating-in-an-e-auction/

http://en.wikipedia.org/wiki/Auction