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Online Auctions May Offer Great Deals―But Don't Get Ripped Off!

Online Auctions May Offer Great Deals―But Don't Get Ripped Off!

Buying something at a terrific price through an online auction can be fun and rewarding―but they don't always offer a happy ending. Here's how you can avoid being cheated.
Techspirited Staff
By Linda Orlando

Better Business Bureaus across the country regularly receive complaints from online auction bidders who believe they have been tricked or defrauded. "There are some pretty sad tales," says Steve Cole, president and CEO of the Council of Better Business Bureaus. "Some buyers fail to receive any merchandise whatsoever; others receive an item that in no way resembles what was advertised. There are buyers who report being misled about the terms of the sale. We also hear from bidders who were tricked into using fake escrow sites when paying for their purchases."

Although the majority of online auction transactions go off without a hitch, there are plenty of situations where the winning bidder doesn't feel like bragging. BBBs in the United States and Canada are offering suggestions to online shoppers to help them learn how to bid safely and successfully at Internet auction sites. "If you use care and common sense, you'll secure some great bargains by avoiding unethical sellers," Cole says. The BBB offers some useful suggestions that can help ensure satisfactory conclusions to an online auction.

1. Choose the auction site carefully.
Be sure to participate in online auctions only on legitimate auction websites. Carefully read the directions for bidders and sellers, and learn what types of protection the site offers before bidding. Some sites offer insurance to protect bidders from losing money on a sale. At the very minimum, a site should offer a guarantee or some kind of security system that screens out fraudulent sellers.

2. Know the terms of the transaction before you bid.
A common pitfall for some bidders is self-inflicted. Each auction should list the details of the transaction, such as who pays for shipping and delivery, how much the shipping will cost, whether or not there are handling fees, whether or not the item is guaranteed, and what the seller's return policy is.

3. Insist on paying with an online payment service or a credit card.
The advantage of using a service or a credit card to pay for an auction item is that if you don't receive it, you can challenge the charges and have your card issuer be your advocate. If you use an online service, check out their policies to see what protection you're afforded if the seller doesn't deliver as promised. Be cautious about paying with a check or money order, because you will have little recourse if things go wrong, and you will most likely lose your payment.

4. For a big purchase, consider an escrow service.
If your purchase involves paying a large sum of money up front, you may want to use a third-party escrow service that will hold your payment until you receive and approve the item you're buying. As with the auction site, always verify that the escrow service is reputable. If the seller demands that you use a certain escrow service and you can't verify their legitimacy, pay attention to that red flag and back out of the deal.

5. Verify the seller's identity and be sure to check feedback ratings and other buyer comments before placing a bid.
If a seller does not have any feedback comments and the auction listing does not provide any information about the seller, avoid doing business with them, especially for expensive items. Don't rely on e-mail communications alone to assure you of a seller's identity and legitimacy.

Some fraudulent sellers have actually gone so far as to use the Better Business Bureau logo or name in an attempt to convince buyers that they or an escrow service is operated or endorsed by the BBB. "It's particularly important to check with us if you see the Better Business Bureau name being used in an unusual manner," says Cole. "We don't, for instance, manage financial transactions for online merchants, nor are we an escrow service." Shoppers are advised to always contact the BBB when there are questions concerning the legitimacy of a service or retailer, or if there are problems with a purchase.