I always thought that the biggest risk when buying on online auctions was to find out that the seller uses very uncommon standards to rate his merchandise, and tends to forget to mention that the item has gone overboard while sailing and got overrun by a train recently.
Well, not anymore. I've learned that online auctions are favourite places for criminals, where they can make huge profits without any risk. A simple scam involves nothing more than some minutes internet access, and can easily return thousands of dollars. The only required investment is an hour in an internet cafe. Compare this to the high risk of common criminal activities, like smuggling, robbery, money laundry, or whatsoever.
The victim, while likely an inexperienced internet novice, can literally be anyone shopping on online auctions. A bad scam may be easily spotted by someone with minimum experience or common sense, a better scam will certainly fool a lot of people. When you are selling your position is of course much better, but still a lot of caution is mandatory.
The wannabe scammer first needs an account before starting his criminal activity. He has two options.
After this has been settled, he can either contact bidders on other auctions, and offer them a similar item for an incredibly low price, or start his own auction.
Then, of course, a merchandise is needed. As seen above, some time and effort is needed to set up a scam, and the average criminal has huge expenses like girls, big cars, clothing, that need to be funded. To generate an amount of money that justifies the effort, he needs either few expensive items to sell, or a lot of less expensive stuff. One top digital camera for 4000$ or twenty auctions for 200$ return the same profit, so he can be creative here. At this point there is a risk that someone notifies the auction site and his account gets suspended. Bad luck for him, but he sure has more ficticious accounts ready to keep on.
Whatever he is selling, he most likely has never seen these things, and picks them after some market research on expensive and sought-after goods. If he's lazy, he will copy&paste text and pictures from the manufacturers site, or from a review. If he's more creative, he will take pictures and text from previous real auctions. The latter one is much harder to spot, of course.
The payment is the critical part. What use is it to scam 4000$, and have the police knocking on one's door a few das later? So it is mandatory that the payment leaves no traces that lead to the scammer. The easiest and most convenient way to achieve this for a scammer is money transfer. Imagine, one hour after you do the payment using a money transfer service, the scammer can walk into a bank at any place of this world, collect the money, and then disappear without the slightest trace. At best you will know that the money was collected in Ulan Bator in Outer Mongolia, and have neither a name, nor an adress. And even if you had, what could you do about it?
Second best is to send cash by mail. A little more risky for the scammer, but it is not that difficult to get away with it either. Again, you end up with no clue who has your money, even when you know at what adress he had acces to when the payment arrived.
Credit cards, paypal, bank accounts may not be bulletproof, but as of today it seems far to much effort for the sammers to set up payment methods using these ways.
After reading the above, you will have a good idea now how it works, and how a typical scam will look like. The following red flags should keep you from bidding.
You have placed a bid on something, and then you receive email from someone offering you a similar item? Probably for a very attractive price? What he really is offering you is a lesson on how to fall for a scam. You can either take his one, which costs money, or read this text, which is for free ;-) Of course, do not buy, such offers are 99,9% scam.
Yes, everyone started with 0 ratings, but if he is selling expensive goods it is better to stay away. The other two "red flags" are scams for sure. Stay away. If for what reason ever you are in doubt, at least see if you can get his phone number and talk to the seller.
If the picture does not show the actual item offered, stay away. The most likely reason for this is that the seller simply doesn't have whatever he is offering. On top, he is even too lazy to grab pictures from other auctions. If you are in doubt, ask specific questions that can only be answered when you have the item in hands, ask for more photos.
This is the crucial point. All scammers accept only money transfer. Do not bid on such auctions, they are scam. If you have already won the auction..
DO NOT PAY
Whatever the reasons or excuses are, there is no room for doubt. This is scam, and you will never see yoour money again. By no means ever pay using money transfer. Better a negative rating than lose a considerable amount of money.
Money transfers are perfect to send money to persons you know, and trust. Relatives in other parts of the world, friends, of course also business partners. It is fast, and secure. But never ever send money to people you do not know.
Yes, of course. Use an escrow. But use ONLY the escrow service named by the auction site! If the seller insists in using a different escrow, you can be sure that it's scam, and hat you will lose your money.
As long as you ship the goods only after having the money in hands, yes. Do not accept cheques or anything elese that takes long time to be cleared.
If you have accepted a cheque,
WAIT UNTIL IT'S CLEARED.
If you want to lose both your sold item and extra money, there is this popular scam: The buyer invents some blabla to send you more money than the item costed, and asks you the favor to send the rest to someone else. After you shipped the item, and payed the scammers's friend, your bank notifies you that the cheque bounced. If you get offers like these, it's scam.
When you really have your money and walk to the post office, make sure that the shipment is traceable, e.g. registered mail, or whatever service your postal service offers to be able to prove that you have shipped the items. Consider insurance for the shipment, and you are 100% on the safe side, and won't have to fear regrets later. Things get lost on their way, and it's good to take simple precautions.