FBI States Online Auction Fraud Biggest Source of Complaints 158
dipfan writes "The FBI says internet auction fraud was the biggest source of complaints last year, according to the annual report by the Internet Fraud Complaint Centre. The Nigerian bank scam still remains popular, even after all these years. Quote: "During 2001, Internet auction fraud was by far the most reported offense, comprising 42.8% of referred complaints .... Non-deliverable merchandise and payment comprise 20.3% of complaints, and credit and debit card fraud make up 9.4% of complaints."
The report is a 27 page PDF file while the Washington Post
wrote up an article about it." Just ask CowboyNeal about some of his fun with dealing with dealers in Hong Kong.
Better than the previous year (Score:4, Informative)
On the other hand, it's nice to see that "suckered into paying good money for Daikatana" rose to 8% on the FBI's compaint list this year.
In other news, some human beings suck. (Score:5, Informative)
Did I say Stuipd Buyers? Why Yes I Did.
Let me give you an example. Completely hypothetical, of course.
Say I were to sell something I no longer desire on Ebay. My goal is to get it out of my house, and recoup some of my investment. So I put it up for auction with a reasonable reserve. (This hypothetical item is a guitar that I haven't played in months)
Somebody new to good old EPay wins my auction. Horray. I now have in my possession my new ebay friend's guitar. I will release it in to his custody after I recieve my 177 plus 50 shipping, for a grand total of 227.00. (Shipping guitars is a joke)
A week goes by, the money order does not show up. My new ebay buddy informs me that he didn't budget his bills right, and can't afford the guitar now. He wants to back out of the auction, like I'm freaking Wal-Mart. He then understands that "Woah! I've entered in to a legally binding agreement, damn!". After informing my new ebay buddy of this fact, he agrees to send payment the next week.
Another week goes by. My Ebay buddy again emails me that he is fiscally irresponsible. He forgot to pay his car insurance for 3 months, and is about to get cut off. Go figure. I hope the insurance company cuts him off. He asks me if he can just cancel this whole transaction. I told him No, because I'm out my auction fees and I will have to file a complaint against him. He threatens, since he has my address (I'm in Iowa, he is in Hawaii), that he knows where he lives and what goes around comes around. After a polite email back to him, he agrees to send me a money order in 2 weeks and then add an additional $50 for my trouble.
Horray for me, but that doesn't begin to cover the time I've wasted on this transaction.
So I get the money on a Monday. The guitar gets packed and shipped out on a Tuesday, signature required. He gets the guitar this past Monday. On Tuesday I get a nice email threatening that because I did not put brand new strings on the guitar for him, that he is returning it. I informed him that I am not a Guitar Center [guitarcenter.com] and that he can't realistically expect to receive a like-new instrument for the price he paid on Ebay.
Nothing back from him yet, and I doubt that there will be. But I bet that you can add him to that 42.8% of complaints, if he can figure out how to dial a phone.
I give up on ebay. Dealing with idiots is not worth the $$$.
-S
Re:How can this be avoided? (Score:4, Informative)
I've used iEscrow VERY happily for several high-dollar auctions ($2000+), and it's worked well. The drawbacks are there though... cost (they take a commission of course), processing time (it takes an extra week or two for the seller to get their money), and so on.
The problem is that people don't put the effort into using these services, or don't want to pay for them. They're there, if you don't use them and get screwed, it's your own damn fault.
MadCow.
(one of the salesmen at our company got hosed for $2500 on a digital camera because he didn't use escrow... I can't really feel sorry for him either!)
Re:"Most complaints" flooding (Score:3, Informative)
First, the way the US is set up forces any interstate fraud issue onto the FBI. Your local police can handle intra-state complaints, but they have no jurisdiction once a problem crosses the state line. They can forward the complaint to the other state, but as a practical matter it will get bumped to the national agency with jurisdiction - the FBI.
Second, we don't know that these are all small scams. A lot of scam artists have learned to keep each individual scam small (<$500, say) to avoid triggering local attention. It's only when you realize that it's a group working together that have scammed thousands of people that you discover this "small complaint" is actually part of a multi-million dollar fraud ring. And that is definitely large enough for the FBI's attention.
how to avoid credit card fraud (Score:5, Informative)
The beauty of this is that if your generated number gets "stolen" by an unscrupulous dealer, you don't need to worry about it because the number will be almost useless!
I'm honestly surprised that these services aren't advertised more widely, because they're probably one of the best ways to protect yourself against credit card fraud when dealing with unknown and far-away merchants. I know that American Express and MBNA cards have this capability, and I've heard rumors that Discover can do the same thing.
Re:how to avoid credit card fraud (Score:2, Informative)
The beauty of this is that if your generated number gets "stolen" by an unscrupulous dealer, you don't need to worry about it because the number will be almost useless!
I'm honestly surprised that these services aren't advertised more widely, because they're probably one of the best ways to protect yourself against credit card fraud when dealing with unknown and far-away merchants. I know that American Express and MBNA cards have this capability, and I've heard rumors that Discover can do the same thing.
I've used both American Express Private Payments and Discover DeskShop in the past and my biggest complaint was that you could not set the expiraton...thus the expiration month/year would always be the current month and year and on many badly-programmed websites the merchant would simply reject it. It may be different now though.