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How to avoid getting cheated on eBay -- periodic post



 
 
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Old January 2nd 04, 07:48 PM
Reid Goldsborough
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Default How to avoid getting cheated on eBay -- periodic post

What follows is a distillation of many people's opinions and
observations, including my own. Additions and corrections are
welcomed. This document is copyrighted -- please don't republish
elsewhere. HMTL version available he http://rg.ancients.info/guide.

How to avoid getting cheated on eBay -- periodic post

- - -
IN A NUTSHELL: Fraud on eBay is common. Because eBay provides minimal
protection against fraud, you're largely on your own. Avoid eBay
auctions from sellers you don't know in which the seller keeps his own
feedback private, in which he prevents you from contacting other
bidders, or in which he has suddenly begun to sell expensive items
when by looking at his feedback you see he has previously only bought
items or sold inexpensive or unrelated items.
- - -

Online auctions can be a great way to buy coins. You can shop
conveniently from your home or office any time day or night. There's a
huge selection, and though the selection is skewed toward the bargain
priced and aimed at bargain hunters, many big-ticket coins are
auctioned as well.

The big three online auction houses are eBay at http://www.ebay.com,
Yahoo Auctions at http://auctions.yahoo.com, and Amazon.com Auctions
at http://auctions.amazon.com. eBay is far larger than Yahoo Auctions
and Amazon.com Auctions combined, with an estimated 85 percent of the
market.

Unlike most in-person auctions, online auctions typically stretch out
over days and end at a specific time. The highest bidder when the
clock strikes, wins. There are tricks to placing winning bids, and
other tricks in maximizing the bids placed on items you're selling.
The strategizing, ticking clock, and winning and losing impart a game
quality to online auctions. Online auctions, in short, are fun.

Fraud

Online auctions can also be risky. Fraud is common. eBay contends that
the rate of auction fraud on its service is very low. It says that
only one "confirmed" fraud occurs per 40,000 eBay listings. That is
indeed a low rate -- 0.0025 percent.

The FBI, on the other hand, contends that the figure is much higher.
As a part of its "Operation Cyber Loss" project, it determined that
the rate of online auction fraud is about one in a hundred, or 1
percent. This is a very high rate of fraud, a whopping 400 times
higher than what eBay contends.

The FBI's figure is the one to believe. eBay, whose earnings continue
to soar, is very reluctant to intervene in individual auctions,
describing its service as merely a venue that brings buyers and
sellers together. Its policy is that it won't interfere, for instance,
with the auction of a blatantly counterfeit coin that's auctioned as
an authentic coin unless it's contacted first by law enforcement
authorities. eBay is very much skewed toward promoting the interests
of sellers -- they're the ones who pay fees and earn eBay its profits.

Though the vast majority of coin dealers are and have always been
honest and reputable, questionable business practices and outright
fraud have long been a part of numismatics, among mail-order dealers
and flea-market sellers as well as dealers who sell on bourse floors,
in-person auctions, and coin stores. The continued popularization of
the Internet is just exposing more people to fraud.

Common problems with online coin auctions include overgrading
(sometimes with the help of fringe grading services), inaccurate or
misleading descriptions, deceptive photography, counterfeits being
sold as authentic coins (with or without the seller's knowledge), and
outright nondelivery of coins purchased.

All the online auction services provide buyers and sellers with some
protection against fraud. eBay provides fraud insurance, but it's
limited. It offers only up to $200 of insurance per item, with a $25
deductible. If you buy from a seller on eBay who is a SquareTrade
participant (the SquareTrade seal appears in their auction listing),
you're eligible for slightly more protection, typically $250, though
this can range up to $1,000, also with a $25 deductible. Very few
sellers, however, participate in eBay's SquareTrade program.

Feedback

One important protection against fraud is "feedback" -- a way for
participants in a transaction to rate one another and for others to
see those ratings. A large percentage of negative feedbacks is a clear
signal to stay away from a particular seller.

But feedback is far from foolproof. The ratings are always skewed
positively, since leaving someone with negative feedback opens you up
to receiving retaliatory negative feedback in return, and many people
are reluctant to risk tarnishing their feedback record this way. One
trick to avoid getting retaliatory feedback is to wait to leave
feedback until the seller has done so first. Some sellers, however,
don't give buyers feedback until they receive it first. At the latest,
sellers should give feedback when the buyer receives the coin and
indicates he's satisfied with it. For sellers, doing this is actually
good protection, helping to prevent angry buyers from leaving negative
feedback without first trying to work out a problem that may not be
the seller's fault.

What's more, a high number of feedbacks (PowerSeller status, for
example) in itself doesn't always indicate that the seller doesn't
sometimes engage in questionable business tactics. An eBay PowerSeller
can have up to 2 percent negative feedbacks, which is a high
percentage of deals gone bad to such an extent that negative feedback
was given. There's also plenty of anecdotal evidence that eBay is
particularly lenient about responding to fraud perpetuated by
PowerSellers, who through their heavy selling pay more in fees to eBay
than other sellers.

Still, feedback can be of some help. Read both positive and negative
feedbacks. You can discount negatives when they appear to be
retaliatory -- left in exchange for a negative feedback given to them
-- or when the feedback is negative yet the comment is positive --
this indicates the person probably clicked the negative box when he
meant to check the positive box. You can glean useful information from
positives when the information in them is negative. The person in this
case is sending a message that he was dissatisfied with the
transaction but doesn't want to get set up for a retaliatory neg.

Another good feedback technique is reading the feedback of those
bidding on a coin. If they have a lot of feedbacks, and if the
feedbacks are for buying similar coins, this can indicate they're
knowledgeable about the coin or the dealer, which is reassuring.

But you need to be careful about "shill" bidders, typically friends or
business partners of the seller who bid on an auction to artificially
drive up its price. Shill bidders often have a low number of feedbacks
and a high percentage of feedbacks for buying from one or two sellers.
Click on Search, then By Bidder, choose Yes for "Include completed
items" and "Even if not high bidder?", and type in the bidder's ID.
This won't be conclusive, however. Newcomers to eBay may feel more
comfortable sticking with one seller. But be careful not to get
carried away and bid more than you intended in an auction in which a
bidder is involved who had bid primarily on prior auctions of the
seller.

Another red flag is a seller making his feedback private. Though eBay
suggests that sellers do this if eBay is investigating unwarranted
feedback (obscene, disclosures of identity or private
information, etc.), a seller who makes his feedback private may be
trying to hide something.

It's also usually good policy to refuse to participate in private
auctions, where the seller keeps the bidders' IDs private, unless you
know the seller. Being contacted by other eBay users is one way to
avoid getting cheated, even though eBay discourages this by referring
to it as "auction interference" and Yahoo Auctions makes it impossible
for people to do this. Still, people do contact bidders on eBay, and
it's often the only way that bidders are protected against cheats.
Cheaters, knowing that some people will try to contact bidders this
way, set up a private auction to prevent this. On the other hand, not
all private auctions are scams. Some legitimate sellers keep bidders'
IDs private to avoid losing them as customers to lower-priced sellers
or because they feel that their customers want their privacy
protected. Unless you know the seller or know he's legitimate,
however, you're on safer ground assuming that a private auction is a
scam auction.

You should think carefully about buying a big-ticket item from a
seller with few feedbacks. It's too easy for a scammer to create new
eBay IDs. But buying a more expensive item from a seller with many
feedbacks can also be risky, depending. One trick that scammers use is
to sell a number of low-cost coins or other items to build up positive
feedback, then auction off a big-ticket coin and skip town, virtually
or otherwise, without sending it.

It's always best when buying an expensive coin to make sure that the
seller has sold similarly priced coins in the past by clicking on past
auctions through the seller's feedback. Unfortunately, eBay saves
auction pages only for a limited time, about three months. If a seller
sells items only infrequently, eBay provides no way for you to see
what those items are. (eBay's search feature is even more limited. It
only permits you to search for past auctions that ended within the
previous two weeks.)

Hijacked Accounts

One eBay scam involves a bad guy hijacking the eBay account of a
seller with a good feedback record by deceitfully obtaining his
password. One possible tip-off during the auction is that the seller
is auctioning a pricey item or items completely unlike those he's
auctioned before. Another is that the seller previously only bought on
eBay, never sold. A possible tip-off upon completion of the auction is
that you're asked to send payment to a location completely different
from the location listed in the auction. If you have questions about
the auction, send a message to the seller through eBay. If his answer
continues to arouse suspicion, don't send your money.

eBay has recently tightened up its security features to try to prevent
this type of fraud. Now, if an automated password-cracking program
fails to guess a password on the twentieth try, eBay flashes a code on
screen that you have to type in manually. Despite this safety feature,
it's still best to use a password that's difficult to crack -- a
combination of letters and numbers and one that's not the same
password you use elsewhere.

Sellers can still be tricked into revealing their passwords to
scammers by clicking on a link in an official looking e-mail message
that appears to come from eBay, a practice known as "phishing."
They're directed to a "spoof" site that looks just like eBay but is
solely designed to obtain people's passwords. To prevent yourself from
falling victim like this and ruining your good feedback, always go to
eBay and related sites such as PayPal through your own bookmark or
favorite or by manually typing in the site's address.

If you have any suspicions for any reason about a coin being auctioned
during the ourse of the auction, send a message to the seller asking
for clarification. If the seller doesn't respond or if you have doubts
after getting a response, refuse to bid. If you've bid on an item in
an on-going auction or if you've won an auction just completed, eBay
lets you request the seller's phone and address. With more expensive
items, it can sometimes make sense to initiate telephone contact
before the auction's completion. When you request a seller's contact
information, eBay informs the seller of this and automatically sends
the seller your contact information.

You can also ask in one of the online discussion groups if anyone has
had dealings with a particular seller or sees anything suspicious
about a particular auction. There are many such discussion groups on
the Internet. The most popular group about coins in general is the
Usenet group rec.collecting.coins. You can access it through a
newsreader such as Forte Agent, e-mail program with newsreading
capabilities such as Microsoft Outlook Express, or the Web through
Google Groups at http://groups.google.com. The most popular online
discussion group about ancient coins is the Moneta-L e-mail group,
available through Yahoo Groups. You can subscribe, for free, at
http://groups.yahoo.com/group/Moneta-L. New online discussion groups
are popping up all the time. One interesting new one about coins is
Coin Talk at http://cointalk.org.

Photos

With lower-priced items, one question to ask the seller is if the coin
pictured in the auction is the coin you would receive, if it's not
already indicated. Some sellers put up a generic picture of the coin
type, which isn't necessarily deceptive, but this should be disclosed.
Some scammers deliberately send a lower-quality coin of the same type
and year from the one pictured, sometimes stealing photos from other
eBay sellers.

You should save the online image of any coin you buy. Sellers
frequently delete these images after the sale to free up disk space
wherever they're storing these images, and there's nothing wrong with
this, but having the picture later can be beneficial if there's a
problem. It can also be a good idea to save the auction description as
well as the auction terms, whether or not those terms are included in
the auction description or provided through e-mail.

Photography can be used to illustrate what a coin looks like or to
deceive. Online images of coins that are too dark or too small or too
fuzzy may indicate the seller lacks imaging skills or is deliberately
trying to hide something. Sharp, bright photos of coins in which the
fields seem overly smooth may have been manipulated in an image
editing program. One way you can sometimes spot this is by saving the
image to your hard disk, loading it into an image editing program, and
looking at individual pixels to see if they've been blurred together.
But don't confuse blurring with JPEG artifacting, which is a result of
image compression. With the latter, you see squares and rectangles
(artifacts) of different sizes when you zoom in. Some sellers punch up
the color of their coins by using software to boost contrast and
saturation. Some of the major auction houses, in fact, have been
sharply criticized for this.

Even good coin images, created without manipulation, are no match for
seeing a coin in person. A photo or scan of a coin can sometimes make
a coin look nicer than it is, sometimes less nice. It can hide
scratches, flatness, and wear. It can impart artificial color, luster,
and relief. On the other hand, it can accentuate scratches and minor
defects if they catch the light at a certain angle, making them look
major. For all these reasons, it's best not to buy a coin, even one
illustrated with a picture, if the seller doesn't offer return
privileges.

Guarantees

It's usually good policy to refuse to buy any higher end coins through
online auctions in which the seller doesn't offer the option of
returning it if you're not happy with it. If the seller doesn't
specify a return policy, email him and ask. Sellers who claim they're
liquidating estates and that therefore all sales are final may be
hiding something unpleasant behind their no-returns policy.

With ancient coins, it's best to buy from a seller who offers a
lifetime guarantee of authenticity, particularly with pricier
specimens. There are many fakes of ancient coins out there, and even
experts occasionally get fooled. If you buy an ancient coin, and it's
later condemned by an authentication service or by several dealers you
show it to informally, you should be able to return it and get your
money back.

One protection with more expensive coins is to ask, before the auction
closes, if the seller will agree to use an escrow service, such as
Escrow.com at http://www.escrow.com. The way it works is that upon the
completion of the auction, the buyer sends payment to the escrow
service. When this payment clears, the escrow service notifies the
seller to ship the coin. When the buyer receives the coin and notifies
the escrow service that it is as it was described, the escrow service
forwards the buyer's payment to the seller.

Typically, the buyer pays the escrow service to use it. At Escrow.com,
the amount of payment depends on the price of the item and whether a
credit card or other payment method is used, with a minimum fee of
$15. Very few coin auctions involve escrow, however, and because a
seller doesn't agree to use it doesn't necessarily mean that the deal
is a bad one.

If you do use an escrow service, you need to be careful about scams
involving fake escrow sites, such as Golden-Escrow.com (meant to be
confused with the legitimate escrow service GoldenEscrow.com) and
Escrow-is.com. You think you're sending your money to an independent
third party, but you're actually sending it right to the crook. The
above two sites have been shut down, though new fake escrow sites open
up. For a list of fake escrow sites and other auction fraud
information, check out SOS for Auctions at http://sos4auctions.com. If
you do use an escrow site, as a buyer, it's best to suggest the escrow
service yourself and to make sure it's a legitimate one.

Counterfeits

Still another common tactic among scammers is selling a counterfeit,
altered, or doctored coin, indicating that they inherited it from
their grandfather or other relative, contending that they know nothing
about coins, and saying that what you see is what you get. Sometimes,
though, people not knowledgeable about coins do inherit authentic
coins and try to sell them on eBay.

eBay recently began prohibiting the sale of coins and other items when
the seller disclaims knowledge of or responsibility for their
authenticity. But eBay's rules are enforced only when people complain
about their being broken, and even here only sporadically.

An auction with unusually low bidding for an authentic or undamaged
coin of its type, date, mint mark, and grade may indicate that bidders
are staying away from it for good reason. The old saw, "If it's too
good to be true, it probably is," very much applies to online
auctions. Deals can be had, but you need to be careful.

eBay is fertile ground for counterfeit operations because of its
hands-off policies. Currently, two large counterfeit operations
involving ancient coins are running on eBay, one out of Toronto, one
out of Lebanon. Scams involving the fraudulent sale of counterfeit
U.S. coins as authentic coins are frequent as well. When in doubt, ask
around.

Shipping Scams

Be careful about sending payment to sellers from abroad, particularly
sellers who ask you to wire money through Western Union. One common
scam, popular among scammers in Russia, Eastern Europe, and Southeast
Asia, is for the seller to tell a skeptical buyer to make out the
funds in the name of the buyer's wife or sister, a name not known to
the seller. The seller says that this way he'll be able to check with
Western Union to find out that the funds were sent to him, so he'll
ship the coin, but he won't be able to collect the funds without
Western Union getting an OK from the buyer after he receives the coin.
A related scam is for the seller to ask the buyer to email him when he
has sent the funds through Western Union but without revealing Western
Union's money transfer control number until he receives the coin.

What happens in the above cases is the scammer claims the funds but
doesn't ship. Western Union doesn't require any information for a
recipient to claim funds except the amount of money expected and the
origination city, state, and country.

Another scam involving shipping is the creation of fake shipping
sites, such as KLM Express and Prompt Express. Scammers have used
these sites to "prove" that they sent the item and that you can send
them payment for it. After they receive your payment, the sites
disappear along with your money.

Miscellaneous

Another trick sometimes used with lower-priced items is for the seller
to charge artificially high shipping and handling fees. Be sure you
know what the charges will be before bidding -- if the charges aren't
specified, ask. Sellers aren't allowed to change the terms of the
transaction after the auction closes. If they ask for more money for
shipping or otherwise makes changes, email them and politely indicate
that this is a violation of eBay policy.

Sellers in the U.S. cannot charge you extra for using a credit card,
alone or through an online payment service such as PayPal. This is a
violation of Ebay's, Paypal's and the credit card companies' rules. If
a seller tries this, email him and politely point out that he can lose
his accounts with these services for such actions.

Another common tactic among cheaters is running three-day auctions,
long enough to snag someone but, in the minds of sellers, not too long
so as to attract undue attention.

In Conclusion

The above are all possible warning signs. But not all private-feedback
or private or low-feedback or bad-photo or no-returns or no-escrow or
inherited-coin or low-bid or transatlantic or three-day auctions are
scams. Try to keep things in perspective. Thousands of coins are
bought and sold every day on eBay without a problem. Some people
overreact in fear and refuse to participate at all in online auctions,
depriving themselves of an enjoyable way to build their collections.

Ultimately, with online auctions, knowledge is power. Arm yourself
with information like this, and you'll greatly lessen your chances of
getting duped. You can find more at the following Web sites:

SOS for Auctions
http://sos4auctions.com

Auction Watch's Tips and Tactics
http://www.auctionwatch.com/awdaily/...cs/index2.html

Internet Fraud Complaint Center's Fraud Tips
http://www1.ifccfbi.gov/strategy/fraudtips.asp

The Federal Trade Commission's "Internet Auctions: A Guide for Buyers
and Sellers."
http://www.ftc.gov/bcp/menu-internet.htm


--

Email: (delete "remove this")

Coin Collecting: Consumer Protection Guide:
http://rg.ancients.info/guide
Glomming: Coin Connoisseurship: http://rg.ancients.info/glom
Bogos: Counterfeit Coins: http://rg.ancients.info/bogos
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