Online auctions can be boon for fraudsters

The B.C. RCMP has declared March fraud prevention month and The Citizen is running a series of stories on the various types of fraud that can be encountered and how to protect yourself against them:

Buying and selling merchandise online has become a popular trend, both for bargain hunters and people with items they no longer have any use for but know could still fetch a good price.

It's also become a lucrative hunting ground for fraud artists using the "anonymity of the internet to rip off unsuspecting buyers and sellers" says the Canadian Anti-Fraud Centre (CAFC).

And if there is a rule of thumb to live by, it's "if it's too good to be true, it probably is."

"For example, scammers may sell a product - often at a very cheap price - just so they can steal your payment card or personal information," says the CAFC. "They may also take your money and send you a worthless item, or sometimes, nothing at all."

At the opposite end, sellers should be suspicious of receiving any payment that is more than the agreed selling price and the buyer asks that the excess funds be returned.

"The scammer hopes you will refund the extra money before noticing that his cheque has bounced," CFAC says.

Scammers have also been known to rig online auctions.

"If you are selling a product, the scammer can enter a low bid followed by a very high bid under another name," the CAFC says. "Just before the auction closes, the scammer withdraws the high bid and the low bid wins. If you are buying a product, the scammer can boost the price using dummy bidders."

However, most on-line auction websites have an on-line learning guide and security tips on proper online payment methods and precautions.

"These payment methods are very secure and may minimize the risk of fraud while offering purchase protection," says the CAFC.

The CAFC also warns buyers against being lured into using payment methods other than the options recommended by the Internet auction site and do not pay by sending cash, money transfers or money orders.

Another option is to use an escrow service, who will hold the buyer's payment until they have received notification that the goods or services have been delivered. Also consider using a credit card with a low credit limit or a single use payment card.

And never give out your social insurance number, date of birth or driver's license number to a seller, the CAFC advises.