Bitten bidders
Online auction fraud turns complex--and expensive
Online auction fraud is difficult for authorities to investigate, and victims rarely recover the money they have lost. "It's not like hopping in a police car and questioning witnesses, and zero to none would be my estimation of how often people recover their losses," says Hutton. Frequently, victims believe the online auction site should solve their problems and fail to report crimes to the correct authorities. In reality, online auction sites are fairly powerless once a crime has occurred.
Often, customers are the ones bringing fraud to investigators' attention. That happened in Nevada, where Orlando Zamora allegedly posed as a jewelry buyer, contacting eBay sellers whose auctions had not been successful. Zamora offered to buy the baubles if the sellers would remove the items from eBay and use a particular escrow service. Orlando's wife, says Nevada Deputy Attorney General Robert Griffy, then masqueraded as an escrow service employee, contacting the seller and pretending that money had been deposited in the account so it was OK to send the jewelry. "We only found out about this when one customer did some research and discovered that the escrow service didn't have any offices in the United States," says Griffy.
The FTC is hoping to crack down harder on such scams, and in April launched "Operation Bidder Beware." But Delores Gardner Thompson, an attorney in the FTC's Division of Marketing Practices, cautions that consumers are still often in the best position to protect themselves. She recommends that online auction-goers act like gumshoes before placing a bid. They should confirm the seller's address, telephone number, and perhaps even match phone numbers with addresses on reverse directories.
The same Internet that provides fraudsters with anonymity, also provides users with tools for tracking down people. Some victims are forming their own "rings" to help others on the Internet fight fraud. After trying to buy a laptop computer, Dale Peterson, an architect and construction manager in New York, discovered an online forum devoted to the seller who took his money and ran. The forum participants--victims like Peterson--tracked the seller to North Carolina, not Atlanta where the seller had purported to operate a company. Another victim used an online reverse directory to determine the seller's true identity. Armed with a name, Peterson then downloaded court documents about the seller--turns out this wasn't his first go-round with cheating--and posted them on the Internet to help other victims.
On May 13, the perpetrator was arrested and charged with wire and mail fraud. Several members of the online forum plan to attend the sentencing hearing in Asheville, N.C., where they will meet in person for the first time. "We wanted to see justice done for the person who stole from us," says Peterson.
DETECTIVE WORK
Trouble Ahead
Before bidding, learn the signs of an online auction scam:
LOCATION, LOCATION. Be wary of an item listed for sale in the United States but later revealed to be from overseas. Dealing with overseas sellers is risky, as it can be tough for U.S. law enforcement to prosecute international cases. Don't send money to addresses not listed in the original ad.
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