In an earlier post today I mentioned some fraud that I had been trying to deal with at The Teddy Patch.  As the owner of an internet auction site, I especially needed to know more about how to protect myself and my investment so I did some research and wrote a post about what I had learned.  I've dusted off that article and included it below as it contains some good information for everyone.    Hopefully, armed with more knowledge we can all be more vigilant and better protect ourselves from this type of fraud.  

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Internet auctions are one of the fastest growing commerce business segments ever.  As a result, on-line auction fraud ranks at the top of all cyber fraud complaints to the FTC.  Buyers and sellers are not the only victims, businesses are also victims.   

There are many types of fraud:  Non-delivery; misrepresentation of the item; stolen items placed at auction; non-payment; stolen identity and credit card fraud; multiple bidding (using different aliases and then withdrawing the high bid at the last minute to win with the low bid); and shill bidding (sham bidding by the seller to drive up the price of an item).

How do you protect yourself from these types of unscrupulous behaviors? 

1.  Be fully aware of auction site policies, fraud policies, or dispute resolution policies.

2.  As a seller, whenever possible do not accept checks or money orders as payment.  Such forms of payment represent 80% of all fraud reported.  Use a secure payment service such as PayPal. 

3.  If you are a buyer, pay with a credit card - consumer protection laws give you the right to dispute credit card charges for non-receipt or misrepresentation if necessary.

4.  Make sure that the auction site you are working with does not allow bid retraction or shill bidding.  

4.  Use common sense in assessing price of an item up for bid and ensure shipping charges appear reasonable.

5.  Ask questions of the seller if you are unsure of something or have a question about the item or terms of the auction.

6.  Pay attention to feedback ratings.  At The Teddy Patch we have a lot of new sellers and bidders with little or no feedback.  A majority of these folks have eBay feedback which they are willing to share.  Don't be afraid to ask for references and get to know a little about the other party and be sure to get accurate contact information from the person you're dealing with.  Who knows?  You may even find a new friend in the process!

So, go ahead - have fun searching for those treasures on line!  Enjoy yourself, but protect yourself as you do!