AUCTION FRAUD
A report released by the Federal Bureau of Investigation (FBI) in March 2001 ranked online auction fraud as the number one scam on the Internet. Internet auction fraud was the cause of 64 percent of complaints filed with the U.S. government's Internet Fraud Complaint Center (IFCC). By comparison, credit and debit card fraud accounted for only five percent of the complaints. Among the practices included by the IFCC as Internet auction fraud were non-delivery of items, misrepresentation of items' value, stealing of goods from an online merchant through the involvement of a third party (triangulation), adding extra charges once bidding was completed (fee stacking), the sale of black-market goods, multiple bidding by the same buyer under different accounts or aliases, and false bidding by the seller (shill bidding).
In October 2000 the U.S. Federal Trade Commission (FTC) also reported that online auction fraud topped its list of "Top Ten Dot Cons," based on complaints it received through its Consumer Sentinel database. The FTC said that the number of reported cases of online auction fraud rose from 100 in 1997 to 10,000 in 1999. The FTC's guide to Internet auctions provides information about protecting against online auction fraud.
FURTHER READING:
Centeno, Cerelle. "Going Once, Going Twice: eAuction Fraud in the U.S." eMarketer Newsletter. May 30, 2001. Available from www.emarketer.com
Dembeck, Chet. "Amazon and Sotheby's Launch Upscale Auction Site." E-Commerce Times. November 19, 1999. Available from www.ecommercetimes.com
Enos, Lori. "Online Auctions Top FBI Net Fraud List." E-Commerce Times. March 7, 2001. Available from www.ecommercetimes.com
Frey, Bruce. Online Auctions! I Didn't Know You Could Do That. Alameda, CA: Sybex, 2000.
"Going, Going, Gone." Business Week. April 12, 1999.
Goldsborough, Reid. "Internet Auctions Examined." Link-Up. November 2000.
Gonzalez, Julio. "The Dark Side of Net Auctions." E-Commerce Times. December 18, 2000. Available from www.ecommercetimes.com
Hunt, Justin. "You've Got to be Bidding." Internet Magazine. December 1999.
O'Loughlin, Luanne, et al. Online Auctions: The Internet Guide for Bargain Hunters & Collectors. New York: McGraw-Hill, 2000.
"Online Auctions Are Taking Off." InfoWorld. February 8, 1999.
Saliba, Clare. "Study: Auction Fraud Still Top Cybercrime." E-Commerce Times. January 10, 2001. Available from www.ecommercetimes.com
Vallone, Julie. "Going Once, Going Twice." Entrepreneur. February 2000.
SEE ALSO: Amazon.com; eBay; Fraud, Internet; Yahoo!
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