11:14 AM

Online Auctions: Going...Going...Uh-Oh!

Follow basic safety and common-sense precautions when you use online auction sites, then enjoy the bargain hunting, Parry Aftab says.

Online auctions are great places to find bargains, especially with holiday money burning a hole in your pocket, or when you're trying to find that one unique gift. But unless you're careful, you can get less than you bargained for. The most frequent complaints received from purchasers are that the goods were never delivered, that the item was misrepresented, was damaged in shipping, or was defective.

Here's a checklist of things you should do if you want to buy at an auction site:

  • Make sure it's a reliable auction site. Auction fraud complaints were more numerous than any other online fraud complaints received by Internet Fraud Watch, accounting for five out of every seven complaints they received. Check the site out with the consumer protection information sites, and if you don't like what you learn, shop elsewhere.
  • Also, ask around at discussion boards, and do some basic research at Web sites you trust to help you find tried-and-true auction sites. (eBay has some wonderful consumer-education tutorials at its site.)

  • Become familiar with the auction site--how it works and its rules, including return policies (are there restocking fees?), shipping and handling costs, insurance options, warranty (look for one year parts and labor on electronics, a defective-product replacement, and a 30-day no-questions-asked full-refund policy), as well as customer-service and complaint mechanisms.
  • Make sure you have all contact information, including offline contact information for the auction site and the seller. (E-mail addresses can be changed very easily.) If you can't find the offline contact information for the site, check out its privacy policy or copyright Digital Millennium Copyright Act disclosures. The snail-mail addresses can often be found there. Getting offline contact information for the sellers may be trickier. That's where feedback and other customer reviews become more important.
  • Avoid individual sellers for big-ticket items, unless they have lots of good feedback or reviews. And get to know the seller you're buying from. Check him or her out carefully.
  • If the site has a seller reviews or feedback page, check it out and see what other buyers have to say about this seller. But you should know that many sellers plant good reviews to mislead buyers into believing that they're reliable. And competitors often plant negative comments, too, trying to steer you away from their competitors. So take all comments in stride. eBay and others now keep track of the feedback and complaints received from buyers and terminate sellers who have a history of failing to deliver. But don't rely on the auction site to protect you from any unreliable sellers. You have to look out for yourself. Also, if you're a member of a certain special-interest collectors' group, you might want to ask the group if any have been burned by a particular seller, or if any members find another to be more reliable. And report what you have experienced, good and bad, so others can benefit from your experience.

  • Make sure you understand the payment terms before you start bidding. If you submit a bid, you're accepting the terms as offered, whether you knew them or not. Ignorance of the terms, assuming they're posted, is no excuse. If you're willing to mail out a check with your address and bank-account information to pay for your purchase (I recommend strongly that you don't), be sure you do it within the time posted. If you prefer the anonymity of PayPal or other payment services, make sure you don't bid on auctions requiring certified check or money order.
  • Don't believe everything you hear or read online. If they promise you a collectible, get a reliable appraisal, and buy only from a trustworthy source. Many sellers try to pass off counterfeit goods as genuine goods. If the sale seems too good to be true, it's probably a scam. Don't suspend your common sense and street smarts just because you're online. If you wouldn't fall for something offline, don't fall for it online. Don't let anyone pressure you into buying "right now." Buyers beware is the motto in the United States when you buy from an individual. Most consumer protection agencies don't have the authority to help you with a consumer fraud complaint against an individual seller. They can only help you when businesses are involved.

  • Don't buy illegal goods online--you can be easily traced. And even if you aren't investigated by the police, do you really want these kinds of people having your home address and credit-card information? People sell term papers, fake IDs, and just about everything else you could imagine online. (Recently, we even found someone selling what purported to be child pornography videos on one of the online auctions. It was removed the moment the auction learned about it from us, but it gives you an idea about some of the people out there.)
  • Use a safe payment method, and try to use an escrow agent and insurance, if available. Use PayPal or other Internet-designed payment systems. Some auctions offer a special service to their shoppers to protect them against small losses. eBay protects its shoppers from the first couple hundred dollars of loss, with a loss deductible. Since the average loss reported is usually about a couple hundred dollars, this may cover most of the average losses.
  • Plan ahead. Check competitive nonauction prices. Decide how much you can spend and stick to it. Many of the new auction sites allow you to preset a maximum spending limit for any particular item. This is a good idea, since many people get "auctionitis," bidding higher than they should because they get caught up in the excitement. Some online auctions have a bidding proxy program, which bids for you up to your maximum even when you can't get online and watch the bids yourself. Don't give into the temptation to bid "just one more time" once you've set your top bid. There's always another auction, and another bargain.
  • If something goes wrong, complain. Complain to the auction site. Complain to the seller. Leave negative feedback or reviews. And if a business is involved, complain to the consumer-protection agencies. The Federal Trade Commission's Web site,, has a place where you can report online fraud. Use it. Notify your credit-card company that a problem has occurred, and if you're seeking to stop payment under your card, make sure you notify them in writing, sent by certified mail to the address they provide for contesting charges, and do it as soon as possible. Your legal rights may depend on it.
  • Now, get out there and buy that Mighty Mouse PEZ dispenser or Felix the Cat clock you've always wanted. Enjoy your bargain, and your holidays!

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