Using eBay: Security
The Internet in general is a hotbed of fraud schemes, and eBay is certainly a microcosm of the Internet. Anonymity provides an easy path to cheating people out of money. But while eBay users are anonymous on the surface, eBay almost always knows who they are. In most cases of fraud committed through eBay, the victims do have some recourse.
In order to make buyers feel safer when making purchases on eBay, all tangible items are automatically insured for $200. A recipe that was supposed to be delivered to you via e-mail is not considered a tangible item. But if you purchased a set of speakers that never arrived, and you go through the dispute process and eBay determines you were defrauded, you can get your money back up to $200. As an incentive to use eBay's PayPal payment system, most items purchased through PayPal are covered up to $1,000.
Buyer fraud is typically less damaging than seller fraud. The most common type of fraud a buyer can commit is simply not paying for an item. Sellers can deal with non-paying bidders by filing an Unpaid Item dispute. eBay will then attempt to contact the buyer and get her to pay. If she does not respond to eBay's attempts after eight days, the seller is reimbursed for eBay's cut of the final sale price and can relist the item for free. If the buyer does respond, the dispute can end in one of three ways:
- The buyer decides to pay, and everybody's happy.
- The buyer and the seller decide together to abandon the transaction, the seller gets reimbursed for the final-value fee and relists the item for free, and everybody's happy.
- The seller decides not to deal with the buyer, the buyer gets an unpaid-item strike against her, and the seller gets reimbursed for the final-value fee and relists the item for free.
In the end, the damage to the seller is relatively small. Another type of buyer fraud occurs when a buyer sends false payment. In most cases, this is in the form of a bounced check, and the seller finds out about it before shipping the item. Bounced checks are as common on eBay as they are in the rest of the world, and many sellers choose not to accept personal checks for this reason.
Tips to avoid buyer fraud:
- Always check the feedback of your bidders. If a user has excessive negative feedback, you may be able to cancel the bid.
- If you accept a personal check as payment, never ship the merchandise until the check clears.
- If your buyer doesn't pay, always leave negative feedback so the non-paying bidder has a harder time striking again.
Seller fraud is what what most people think about when they worry about using eBay. There are two main ways in which a buyer can be defrauded by a seller: The item the buyer purchased is dramatically different from how it was described in the listing; or the item simply never arrives.
One thing to keep in mind when you think you've been defrauded is that miscommunication is common on eBay. For instance, if you didn't read every word of the auction listing for your item, you may have missed the part the said the seller would be out of town for three weeks and wouldn't be able to ship the item until she returned. This could be why you don't have your item and the seller isn't answering your e-mails. Also, e-mail is not the most straightforward form of communication. If your item hasn't arrived after two weeks, and you've e-mailed the seller but haven't heard back, it's a good idea to check your junk mail folder. Your seller may have sent a response e-mail that just never made it to your inbox. If there's nothing from the seller in your junk folder, you can request that eBay reveal your seller's phone number so you can give him a call and see what's going on.
If you don't get an answer to your phone call (or if your seller lives in another country and it would cost too much money to call), your next step is to start the dispute process. When a buyer believes he has been defrauded, he can file a complaint, and eBay will work to solve the problem. (If you used PayPal, you should file a complaint there first, because your item is probably covered under PayPal's buyer protection policy and there's a separate system for that.) When you file a complaint in eBay's "Item Not Received or Significantly Not as Described" system, eBay will act as middle man between you and your seller to try to settle the dispute. If that fails, you can file a claim to get reimbursed for your purchase (but if you made your purchase using a credit card, you need to file a claim with your credit card company first -- eBay won't reimburse you if your credit card company is willing to).
Tips to avoid seller fraud:
- Always check seller feedback before placing a bid.
- Ask all relevant questions before bidding on an auction. Some sellers think that if they don't say what condition the item is in, it's the buyer's fault if he bids on the item assuming it's in good condition and it turns out to be a piece of junk.
- Always leave negative feedback for unscrupulous sellers -- this makes it harder for them to continue committing fraud.
Fake escrow services are another way in which both buyers and sellers can be defrauded. See eBay Help: Using Escrow to learn about the safest way to use escrow for expensive purchases.
These are the main methods of fraud committed through eBay, but there's another kind of eBay-related fraud that happens outside the eBay Web site. If you receive an e-mail from eBay asking you to update your account information, it's a good idea to be suspicious. Identity theft resulting from spoof e-mails that look like they're from eBay is a big problem. Many people know this scam as "phishing." These e-mails typically tell you that there is a problem with your credit card number stored on eBay, and unless you update your account information you won't be able to use the site. Sometimes there's an account information form in the e-mail itself, and sometimes there's a link that directs you to what looks like eBay's account information page but in fact is a spoof Web site. When you submit your account information, the scammer gets his hands on your credit card information and your eBay password. (PayPal spoofing is just as common as eBay spoofing, so you should be on the lookout for those e-mails, too. See PayPal: Protect Yourself from Fraudulent Emails to learn more.)
If you're aware of the problem, it's actually pretty easy to avoid getting scammed in this way. First, e-mails from eBay never include account information forms; second, even though the link in the e-mail looks like an eBay URL, once you click on it, you can see in your browser's address bar that you're not at eBay at all. One fairly surefire way to avoid this type of scheme is by downloading the eBay security toolbar, which will simply tell you when you're at a fake site. For a full list of ways to determine a spoof, see eBay: Spoof Email Tutorial.
If you find yourself the victim of one of these scams, and you've submitted your account information in a non-eBay form, you should immediately cancel the credit card number you provided and change your eBay password. In addition to using your credit card, these spoofers can use your eBay identity to cheat people, ruining your eBay reputation in the process.
It's worth noting that you can also become the victim of identity theft simply by providing your credit card number in a seller's own checkout process. Most sellers who have their own checkout process are high-volume sellers with plenty of positive feedback (in the thousands). If you come across a seller with a low feedback number, be wary of providing your credit card information outside the eBay checkout system.
Tips to avoid identity theft:
- Know what a spoof looks like, and always check for the signs before providing any information.
- Always report spoof e-mails to eBay (see What to do about spoofs). eBay will confirm that it's a spoof and investigate the incident.
- Carefully check seller feedback before providing your credit card information in a seller's private checkout form.
If you're diligent and careful, eBay can be a safe place to shop. Millions of people buy and sell on eBay with no problems at all, and as a result, eBay is thriving. In the next section, we'll take a look at the business of eBay, find out how it began and see what competition is out there.