Going, Going, Gone! Online Auction, Sales and Rental Scams
Websites offering merchandise and places to rent or vacation are convenient, they often offer plenty of options to choose from, and you might find a really good deal online—a good deal, that is, unless it turns out that it was all a scam.
While the vast majority of online auction sales are legitimate, criminals and con artists are out there. Since an online sale involves paying for something that you have not seen in person, you may run the risk of getting scammed.
General Buying Tips
If you plan on buying merchandise sight unseen—especially something expensive—make sure you understand exactly what is being sold, the item’s condition, shipping and handling costs, and the return policy. Research the seller. Know who it is, where he or she is located, the seller’s phone number, whether he or she has sold previous items, and look for feedback from previous buyers.
Phantom Merchandise Scam
In this scam, a criminal posts a copied picture of an item for sale on sites such as eBay or Craigslist that he or she doesn’t own. If the seller claims that he or she is out of the country and asks you to wire the money or transfer funds electronically through a cash card or bank transfer, that’s a tipoff that it’s a scam. Criminals who run these scams generally do so from foreign countries. Unfortunately, once they collect electronic payments from the buyer, the money is generally gone—just like mailing an envelope with cash.
Not What the Seller Claimed
Con artists may post a picture and description of an authentic item for sale, but what arrives is a knockoff, damaged merchandise, or a generally inferior item. These are often goods advertised at unusually low prices. Do your homework when shopping online, and be wary of anyone offering something priced far below the market value.
Use Credit Card or PayPal—Don't Use Wire Transfers or Cash Cards
When purchasing through an online auction site such as eBay, avoid doing business with anyone who insists on a wire transfer (such as Western Union or MoneyGram), electronic cash card, or money order. Using a credit card (not a debit card) affords buyers certain consumer protections. PayPal affords buyers certain fraud protections. Both provide a payment dispute process. If a seller demands to close the deal outside of the auction site’s trading environment, that’s a red flag.
Rental scams work much like phantom merchandise scams. A criminal posts a copied and pasted photo of an apartment, duplex, townhouse, house or vacation property, and lists it as available. The pictured property may truly be offered for rent by the actual owner, it may not be available for rent at all, or it may not even exist.
The same advice for buying online auction items holds true for online rentals—protect yourself when the transaction involves a seller you aren’t meeting in person. Confirm the seller’s contact information, including his or her address and phone number, and look for any other feedback on the seller. You should visit the property for rent or try to find someone you know who can visit it for you—avoid a seller who won’t meet you in person or allow you to see the rental property in advance. Don’t wire money. If the person who placed the ad claims that they are out of the country for an emergency, work assignment, or volunteer work, that is a sign of a possible scam.
Report Online Scams
If you lost money through an online auction or rental scam, file a report with your local police department or sheriff’s office. If the scam occurred through a website, contact that site and report it. You can also report online scams to the Internet Crime Complaint Center (IC3), which is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center. The website is www.ic3.gov.