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How To Steer Clear Of Expensive Auction Traps

August 21, 2014 by CreditCardsCo™

The online auction has been around for quite some time, affordably connecting people with the items that they need and want. However, you have to be cautious. There is a lot of questionable activity that occurs on auction sites, so you have to be able to identify those situations so you do not fall into an expensive auction trap.

For Canadians, shopping for the best deals on the Internet through online auctions can present a very fun and exciting opportunity. The unfortunate aspect is that there are a lot of crimes that happen in the Internet auction world. This is because auction websites are not responsible for most of the problems that occur between buyers and sellers. Winning bidders are usually at the mercy of the individuals they do not know who are selling the items.

So the question that you have to ask is how you can steer clear of these scams and traps that can cause you to lose money? You do have reputable auction sites, such as eBay, that support online payments that are secure. Sites such as eBay also provide user information that is detailed and they do not leave users in the dark as to their terms of use, privacy policies, and fraud liability.

As for the most common auction hazards, they include bid rigging, misrepresented merchandise, undelivered items, fraudulent escrow services, and prohibited items.

Bid Rigging

There are some sellers out there who will be dishonest. They will create fake user IDs and then place fake bids through them in order to drive the prices of their listed items up. Before the auction ends, the scammers will retract their fake bids and this forces the legitimate bidders to pay higher prices.

There are only three situations in which eBay will allow a bidder to withdraw their bid. Those three situations are: The bid had typos, the seller drastically changed the item description, and the buyer was unable to contact the seller. If the bid is retracted because of a typo, a corrected bid must be submitted right after. If this isn't done, eBay can suspend the account. eBay also tracks the number of retractions bi-annually and they discipline the repeat offenders.

Regardless of the site that you are using, it is important to make sure the site has strict procedures for bid withdrawals. Strict policies on the issue reduce the odds that prices will be artificially inflated.

Misrepresented Merchandise

When you bid on an item, you expect it to be in the condition that the seller states. When you receive it and it's not, the experience can be very upsetting. Unfortunately, there are fraudsters out there who send useless goods that are nothing like what they listed. While it is recommended for you to read the seller's product description carefully before submitting a bid, that doesn't always provide protection. It does, however, protect you more so than it would otherwise.

If there are any details missing in the seller's description, don't be afraid to ask questions. You need to know details, such as the item's size and the shopping costs. You also want to look at the different payment methods and whether or not there is a return policy in case the item is not to your satisfaction.

For every transaction, auction websites like eBay tracks buyer feedback. Make sure you look at this feedback so you can see what other customers thought about their dealings with the seller.

When you do receive the item, you can report the discrepancy directly to the auction site in many cases.

Undelivered Items

The most frequent scam comes after the auction has closed and the buyer pays. The next thing the buyer knows, weeks have passed and no item has been received.

When this occurs, the buyer needs to try to contact the seller. For eBay members to protect themselves against losses, they can sign up for the PayPal Purchase Protection Program. eBay also asks buyers to notify them of undelivered goods within three days after the date they should have received the item. Such crimes can also be reported to the Canadian Anti-Fraud Centre.

This is another case where it pays to research the seller in-depth. It is also important to keep records of all correspondence. That way if there is ever any question about what was said between the two of you, you have that record.

Fraudulent Escrow

Escrow services are not related to the auction site. They are third party services that hold payments until the auction merchandise is received by the buyer. Only then will the seller be paid by the escrow service. This is a service that requires a fee and people typically use them when they are buying items for over $500.

It is very important that you are aware of fraudulent escrow services. There are criminals that will produce websites that look legitimate so they can steal passwords and other personal information. Because the fraud risk is high, eBay recognizes and that is it.

A good rule of thumb is to never click on a hyperlink in an email that is supposedly from an escrow service site. This is a very common trick that criminals use to get your financial information.

Prohibited Items

Auction sites that are not legitimate may allow the listing of items that are illegal for Canadians to buy. If a Canadian purchased an illegal item through an auction website, both the buyer and seller could face criminal charges.

eBay provides buyers and sellers with a lengthy list of items that are illegal. Examples include government identification documents, surveillance equipment, drugs, and weapons. These lists are usually easy to find on legitimate auction websites.


It is best to read everything, evaluate every item, and use a great deal of caution on auction sites. It is also best to use reputable sites so you know you can get answers if an issue comes about. By exercising these few things, you can avoid the expensive consequences of an auction gone badly.

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