Online sales fraud, which may take the form of online auction fraud, is a type of scheme whereby scammers obtain payment, merchandise, or credit card information from unsuspecting individuals and organizations.
Main Categories of Online Sales and Auction Fraud
- Non-Delivery: A scammer elicits an advance payment for merchandise or a service, but the merchandise or service is never delivered to the customer (the victim).
- Non-Payment: A scammer receives merchandise or a service, but does not remit payment to the seller (the victim).
- Phishing: A scammer receives credit card information from a prospective buyer (the victim) with the real intention of stealing said information from the victim and using it for fraudulent activity. This category typically accompanies a non-delivery scheme.
Red Flags
- The price of a good or service seems too good to be true.
- The alleged seller of a good or service provides elaborate justification on why the item is cheaper than market value.
- The alleged seller or buyer uses a post office box instead of a physical address for delivery of payment (in the case of a seller) or delivery of a good (in the case of a buyer)
- The alleged seller uses a free online email service to communicate.
- The alleged seller or buyer avoids regular communication channels or provides a phone number that appears to be out of service.
- The alleged seller or buyer asks for your social security number or other personally identifiable information (PII).
- The alleged seller or buyer claims to be a U.S. military member stationed overseas.
- The alleged seller claims to be selling an item because it belonged to a lost loved one or deceased family member.
- The alleged seller or buyer encourages you to complete the transaction “offline” or outside of the official online marketplace platform to avoid fees.
- The alleged seller encourages you to purchase the item via wire transfer or gift card.
- The alleged seller insists on using prepaid gift cards for payment and asks you to photograph the gift card to send proof of payment to the seller.
- The alleged seller tries to rush the sale.
- The alleged seller requests additional payments after the sale to cover certain previously undisclosed fees.
How to Protect Yourself
- Use reputable websites to purchase and sell merchandise and services.
- Ensure the websites you are using are SSL encrypted by looking for a lock icon next to the URL in your browser.
- Review the history and customer feedback for any buyer or seller to identify bad reviews online.
- Utilize an online search engine to search the name and contact information of the prospective buyer or seller to identify any negative associations.
- Check if the buyer or seller has multiple email accounts and phone numbers listed on the online marketplace platform. If so, this is suspicious.
- Try to determine any discrepancies between information publicly available online and information posted online by the buyer or seller.
- If using an escrow service, verify that it is legitimate.
If you suspect you are a victim of an online sales or auction fraud scheme, contact your local Secret Service field office.
Source: Avoid Scams: Online Sales and Auction Fraud (secretservice.gov)
