Security Sentinel:

Who's to blame when you get cheated in an online auction?

By Toni McConnel
iApplianceWeb
(04/25/05, 12:54:52 PM GMT)

The U.S. Federal Trade Commission (FTC) has identified auction fraud as the most common crime perpetrated over the Internet, constituting 48% of all Internet-related (which includes e-mail) consumer complaints. The most common type of fraud in online auctions is that the buyer pays for an item but never receives it, or that the item received does not match the description advertised by the seller. 

eBay, by far the most popular and successful auction site, has been quoted as saying that only 1 in 10,000 auction transactions on eBay are fraudulent.  If we can believe that figure (and I don’t), that’s a mere .0001 percent of the estimated 25 million current eBay users. 

Even if that figure is accurate, the trouble with this claim is that to be reportable fraud, the seller must in some way deliberately dupe or cheat the buyer.  If you count the incidents where sellers mislead buyers without actually committing fraud, the number skyrockets.  I see a lot of things happening in auctions that may not be outrightly fraudulent, but which can certainly said to be deceptive.   

For example, about a month ago I was looking for a Scunci steamer, a device that produces steam and allows the user to clean small or awkward areas by directing the steam with a variety of attachments. I used eBay’s “Watch this item” feature to track auctions of the steamer so I could determine what kind of price I might expect to get.   

I discovered several disturbing things.  One seller claims that the suggested retail price of the Scunci Steamer is $99.95.  Baloney.  Even if this actually represents the manufacturer’s suggested retail price, such prices have little to do with what an item actually sells for. 

Here in Flagstaff, both Walgreen’s and Target sell the steamer for about $60.  The best price I could find today on the Web is $40, but of course when ordering from the Web you have to consider shipping costs.  In any case, claiming the steamer has a retail price of $99.95 is misleading. 

The next thing I discovered is that some sellers attempt to scam buyers by selling cheap, but then charging outrageous amounts for shipping.  Today the lowest shipping charge I could find for the steamer was $9.

Since shipping costs are calculated automatically by eBay on the basis of weight and location for any selected carrier, plus a seller-chosen extra amount for ‘handling’, it is probably safe to assume that $9 is a bare-bones but realistic shipping charge for this item.  But most sellers are charging $20 to $25 for shipping, and I found one that is charging close to $30!   

Most disturbing of all is that I saw one auction of the steamer close with a high bid of $56.  When you add the $20 shipping charge, the bidder paid $16 more than the typical retail charge for it.  I assume the bidder thought s/he was getting a bargain.   

Although shipping charges are clearly posted on every eBay auction item, I have a feeling that most people don’t read that far.  And the fact that an item may be used, not new, may be buried in the detailed description that you have to scroll down to see—and researchers say that most people never scroll down past the initial screen.  If the information is there for the prospective bidder to see, I doubt if the FTC would call this ‘auction fraud’.   

The global Internet is a frontier where, just as in the Old West, lawlessness abounds.  This isn’t news; we are all aware of this as we struggle to keep our computers free of viruses, malware, and spyware,  and we worry about using our credit cards online for fear of identify theft. 

But we live in a society where we have been conditioned to expect someone else to take care of us.  After all, we have police and fire departments to deal with physical-world, real-time crises.  We have all sorts of government agencies to license businesses and see that buildings are constructed safely and that everyone who drives is licensed and that minors have to get fake IDs in order to buy cigarettes and liquor.   

But we can’t carry that expectation forward into the global cyberworld.  No one has figured out yet how U.S. law enforcement agencies can catch thieves who may be in Russia or Asia or living on a yacht in the middle of the ocean and sending phishing spam by satellite. 

We can’t just wait for someone else to take care of us.  Just as people in the Old West carried their own guns to protect themselves because the sheriff or the U.S. marshal might be hundreds of miles away, we have to take responsibility for our own safety on the Web, and the only weapon available to us for self-defense is ‘awareness. 

Frankly, I can’t feel any sympathy for the person who paid a total of $76 for a $60 steamer.  I think s/he was the victim of his/her own stupidity, not auction fraud.  “Let the buyer beware” is just as relevant on the Internet as it has ever been, perhaps more so. 

Toni McConnel is executive editor for iApplianceWeb.

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