HOW TO AVOID EBAY SCAMS AND FRAUD
Most scams and fraud can be avoided by following common sense. If it is too good to be true, then it is. Don't be greedy. By following a few simple precautions, you can avoid scams and rip-offs.
One of the first things you should look at is the feedback of your transaction partner. Having an excellent feedback score is a good start. However, don't trust the feedback score blindly. There are feedback scams that can make a scammer's feedback look stellar. Examine the feedback closely for any inconsistencies. Don't be shy about asking questions.
Never pay for your eBay purchases using a wire transfer. Anyone that asks for a wire transfer as payment is almost certainly a scammer. Once the funds are transferred, it is next to impossible to get the money back.
Don't fall victim to phishing email scams. Never give your your eBay account information and password. EBay will never ask you for your password. Don't respond to emails requesting you to verify your account. These phishing emails are all fake. Be very careful if you click on links embedded within emails. The links can be easily disguised and could take you to a spoofed web site where you could inadvertently give away your account information.
Educate yourself about the common eBay scams that we have listed here. The more you know about what the scammers are doing, the less likely you will fall prey to them.
SCAMS COMMITTED BY EBAY BUYERS
These scams are targeted against unsuspecting eBay sellers. Many of the scams take advantage of sellers not knowing all the rules for safe trading on eBay. It is very important for a seller to completely understand PayPal's seller protection program. Familiarize yourself with the scams listed below. You don't want to be the next victim of an eBay scammer.
Examining the buyer's feedback may not reveal any clues about the intent of the buyer. Building strong feedback isn't as important for buyers as it is for sellers. Many legitimate buyers have a feedback score of less than 5. Take a look at the buying pattern of the buyer. If they have bought similar or related items in the past, then the buyer is most likely legitimate.
On the other hand, if they have only bought a few really cheap items in the past and all of a sudden they are buying a very expensive item, be very careful. You can't distinguish between a scammer and a legitimate buyer when the feedback is low. Follow all the procedures to the letter. If the buyer behaves suspiciously and won't confirm the shipping address, refund the payment, file a non-paying bidder alert and relist the item.
Item Not Received Scam
Scammers often prey on newbie sellers that don't understand the rules of using PayPal. Many new sellers don't know about delivery confirmation. The scammer will use PayPal to pay for the item and wait for it to be delivered. Once the package arrives, the scammer will check if delivery confirmation was used. If it was, then you are safe and the scammer and will try to find another victim.
However, if delivery confirmation is not used, the scammer will open a dispute with PayPal and claim the item was not received. Unable to show proof of delivery, PayPal takes the funds out of the seller's account and returns it to the scammer. There is nothing the seller can do other than learn a hard lesson.
To prevent this type of scam from occurring, clearly state delivery confirmation will be used in the item listing. This will prevent scammers from bidding on your items in the first place. Shipments using UPS, FedEx, and DHL automatically come with delivery confirmation. You must add delivery confirmation for packages shipped by USPS. Keep the delivery confirmation number for at least 45 days after the payment was received. This is the time limit for buyers to initiate claims against sellers.
Over $250 PayPal Scam
This scam is similar to the "item not received" scam. Again, the scammer will use PayPal to pay for the item and wait for it to be delivered. The difference is the item sells for $250 or more. When the package arrives, the scammer will check if signature confirmation was used. If so, the scammer will leave the seller alone and move on.
If not, the scammer will open a dispute with PayPal and claim the item was not received. Even if the seller used delivery confirmation and can show the item was delivered, it will not help. Without proof of delivery using signature confirmation for items $250 or more, PayPal will take the funds out of the seller's account and return it to the scammer. This is an extremely hard lesson to learn as the item may have been quite valuable.
This exact scam happened to me. I sold an item for $254 to a scammer using delivery confirmation. The scammer claimed to PayPal the item never arrived. I was able to show proof of delivery with delivery confirmation. I pointed out the buyer had bad feedback and similar issues with other sellers. I mentioned the item was only $4 over the $250 limit. None of it worked. PayPal took the money from my account and gave it back to the scammer. I learned a hard lesson.
To protect yourself from this scam, always use signature confirmation for items that sell for $250 or more when PayPal is used. Add an extra $5 to the handling fee to cover the extra cost of using signature confirmation if you know your item will sell for over $250. Pay for the signature confirmation out of your own pocket if necessary.
Credit Card Chargeback Scam
PayPal allows buyers to fund their purchases with a credit card. This is very convenient for buyers, but opens the door to fraud for sellers. If the credit card being used is stolen or the buyer initiates a chargeback, the credit card company will take the money back from PayPal. Whether PayPal takes the money from the seller's account depends if the purchase is eligible for PayPal's seller protection policy.
To be eligible, the seller must ship to the buyer's confirmed shipping address. Unfortunately, many legitimate buyers have not taken the time to confirm their shipping address with PayPal. It is not worth the hassle of convincing buyers of inexpensive items to confirm their shipping address. Scammers don't usually bother with these types of items and I have not had any problems with this approach so far. However, for expensive items, clearly state you will only ship to confirmed shipping addresses in your listing. Don't make any exceptions. The stakes are too high to risk a chargeback.
Fake Money Order / Cashier's Check Scam
Money orders and cashier's checks used to be considered as good as cash. Not anymore. The proliferation of high quality counterfeit money orders and cashier's checks has put an end to that. Don't be fooled if your bank accepts the counterfeit and credits your account. If it turns out to be a fake, the bank with take the money back out of your account. Bank tellers are not experts at spotting fakes and it could take weeks before the bank finally discovers that it is a counterfeit.
This scam generally comes in two flavors. The dollar amount on the money order is for the exact purchase price, or dollar amount could also be in excess of the purchase price. In the latter case, the scammer will want you to refund the difference between the amount on the money order and the purchase price. Don't fall for this. Whenever someone wants you to refund money for a money order or cashier's check, it is always a scam. Scammers will try all sorts of trick to get you to comply. The people that fall for this scam get greedy as they are led to believe that they can keep a large portion of the money order. Often, these types of scams are perpetrated by people in foreign countries. Be on your guard when dealing with international buyers.
Money orders from the USPS are most often used by buyers. While the fakes look real, you can spot them by knowing the security features that are required to be present:
- A watermark containing Benjamin Franklin images running from top to bottom when held to a light.
- A security thread to the right of the watermark running from top to bottom with the letters "USPS" alternating forward and backwards when held to a light.
- No discoloration around the dollar amount digits. Discoloration is an indication that the digits may have been tampered with to increase the value of the money order.
- $1,000 is the maximum value for domestic and Canadian money orders. $700 is the maximum value for international money orders.
- Visit USPS money order security features for more information.
Cashier's checks also have security features that you can examine. However, the best way to validate a cashier's check is to call the issuing bank. First, verify the phone number on the check actually belongs to the bank and not to the scammer. Then call the bank to verify that they actually issued the check. Once the bank confirms the check is valid, then you know it is real.
Send UPS / FedEx / DHL Truck To Pick Up The Item Scam
Some scammers try to trick the seller into shipping the item before it has been paid for. What the scammers do is arrange for a shipper like UPS go to the seller's location to pick up the item. If the person that greets the UPS driver is unaware that the item has not been paid for, they may actually hand over the package. Once the item has been picked up, there is no way to stop the package from being delivered to the scammer. This scam relies on confusion at the seller's premises to work. Since the scammer does pay for the shipping, this scam is typically attempted on expensive items.
Someone tried to pull this scam on us by sending over a FedEx truck to pick up some expensive electronics that we were selling. Luckily we knew that the item was not paid for and we sent the FedEx driver away and relisted the item. What we should have done was to give the driver a big oversized box of bricks. This would have cost the scammer some good money to ship the bricks back to him.
Buyer Requests Shipping to Different Address Scam
This scam usually occurs when an innocent victim's PayPal account has been hijacked. The scammer will not change the hijacked account's shipping address as this will send an email to the true account holder. Instead, the scammer will try to convince a seller to ship the item to a different address which is often in another country. Typically the scammer will claim that he is moving or that the item is for a friend. Don't fall for any stories. Ship your items only to the confirmed address. If the buyer want to ship to a different address, insist that the buyer change the shipping address on their PayPal account to where they want it shipped and reconfirm it. Otherwise you will be liable if a chargeback occurs.
You Have Been Chosen To Sell Our Products Scam
An unsolicited email will be sent to your eBay account. The email will compliment you on your great positive feedback and state that you have been selected to be an exclusive seller of some fancy products. All you have to do is list the items for sale on your account. When you receive payment, you keep a portion and send the rest to them. Then they will ship the product to the buyer. It sounds like a perfect drop ship opportunity. Yes, perfect for the scammer.
Of course, after you send the money to the scammer, they won't send anything to the buyer. This means that you will be left holding the bag when the buyer demands their money back. The best thing to do is delete all unsolicited emails offering you an "opportunity" to sell exclusive products.
Blame The Shipper For Damaged Item Scam
A scammer will have a broken or damaged item that he wants replaced for free. The scammer will search for an eBay seller selling exactly the same item and offering shipping insurance. After the item is received, the scammer will switch the unbroken item for the bad one and claim it has been damaged.
If the shipper grants the insurance claim, the scammer will get his item replaced for free. If the insurance claim is denied (because there is no damage to the box and the scammer forgot to smash it), the scammer will have the credit card company reverse the charges. If the purchase was eligible for seller's protection, then you will be protected and PayPal will eat the loss. Otherwise, PayPal will take the money from your account. This is a tricky area as PayPal will not cover claims of shipping damage.
You can protect yourself from this scam by taking pictures of serial numbers or other unique identifying features. Be sure to include them in your listing. Scammers will avoid listings that can prove the item has been switched.
Scammers are on the lookout for unsuspecting eBay buyers. Novice buyers are especially susceptible to being scammed. As a buyer, there are a few things that you should always do:
- Buy only from sellers with at least a feedback score of 50 and 99% positive rating.
- Verify item is eligible for PayPal's buyer protection program.
- Use PayPal for payment.
- Use a credit card to fund the PayPal payment.
- Require shipping insurance for expensive items.
Just doing these five things will protect buyers from most sellers' scams. For expensive items, examine the seller's feedback more closely. See feedback scams for more details on what to look for.
Fraudulent Item Scam
This scam is quite simple. The scammer will list something they don't have. Usually the item is expensive such as a digital camera. When the buyer pays for it, the scammer takes the money and disappears. Always use PayPal for purchases as the buyer is protected against non-receipt of the item. Make sure the amount of the protection covers the final price of the item.
Counterfeit Item Scam
Knockoff products are everywhere and eBay is no exception. Tiffany and Co. has publicly stated that 75% of all Tiffany products sold on eBay are fake. Jewelry, designer handbags and celebrity signatures are examples of categories full of counterfeit items. I have seen fake plastic Canon cameras intentionally designed to look like expensive professional cameras. It is buyer beware situation and buyers need to know exactly what they are buying. The seller actually may not realize that they are selling a knockoff product.
To protect yourself from receiving counterfeit products, do some research. There is a lot of information on the web offering tips on how to detect a counterfeit. Always use PayPal for your purchases. The buyer protection policy provides protection when the item is not as described.
Shill Bidding Scam
This type of activity occurs more often than eBay likes to admit. Instead of listing an item with a reserve price or a high starting price, the scammer will list the item with a low starting bid. When a buyer bids on the item, the scammer will use another account to shill, or bid up the item. If the buyer has placed a proxy bid, the shill will keep bidding until the proxy bid is exceeded. Now the scammer knows the value of your proxy bid. The shill will then retract the bid and with a different shilling account, bid right up to your maximum proxy amount. The effect of shill bidding is the buyer will pay more for an item than they normally would.
Unfortunately, there is no easy way to detect shill bidding. You can check the current bid history to see who is bidding on the item. Then check if any of the current bidders have bid on other items from the same seller. If you notice unusual bidding activity, then there may be shill bidding occurring.
Fake Escrow Site Scams
This scam typically involves very expensive items like cars and big screen TVs. The scammer tries to lull the buyer into a false sense of security by suggesting to use an escrow service. Unfortunately, the escrow service suggested is completely fake and is operated by the scammer. Fake escrow sites look very authentic and the domain names look similar to real escrow site names. Once you send the money to the fake escrow site, the scammer takes your money and disappears.
The only escrow site recommended for use by eBay is www.escrow.com. Don't use any other site. If a buyer or seller recommends using a different site, it is probably a scammer trying to rip you off. See Using Escrow Services for more information.
Hijacked Account Scam
Scammers are on the lookout to hijack the accounts of sellers with good feedback. Once the scammer has access to an unsuspecting seller's account, they use the account's excellent feedback to scam buyers. The scammers will list high-end expensive items and disappear with the buyer's money.
The scammers need to use dormant accounts otherwise the true owner of the account will notice the fraudulent listings appear. Check the seller's feedback to see if the account has been dormant. See if the current listings are consistent with the items sold in the past. If an account is suddenly selling plasma TVs when only children's books were being sold in the previous month, then the account may have been hijacked.
Be suspicious of listings that only use stock photos for expensive items. While a scammer can steal someone else's pictures as use them, most don't even bother and will use a stock photo provided by eBay. Ask the seller to send you a picture of the serial number or some other unique feature of the item. If the seller is unwilling to do that, you may be better off looking elsewhere.
Blame the Shipper for Damaged Item Scam
Unscrupulous sellers that have broken or damaged goods try to unload them on unsuspecting buyers. The scammer will claim the item is in excellent condition in the item listing. Usually only stock photos of the item is used. When the buyer receives the item, the scammer will claim it was damaged in shipping. An insurance claim will be filed with the shipper. If you are lucky, you will get your money back from the insurance.
PayPal may or may not honor a claim for damaged goods if it was uninsured. If PayPal rejects your claim, call your credit card company to reverse the charges.
Unsolicited Offer to Purchase An Item Scam
You may receive an offer to buy the item after you have just lost the auction. Sometimes these offers look like second chance offers from the seller of the original auction. In reality, they are scammers trying to steal your money. The scammer will insist that you make the purchase outside of eBay and will offer you a discount for doing so. Unfortunately, you won't be covered by eBay or PayPal’s buyer protection program for transactions outside of eBay. Once the scammer has your money, they will disappear and you will receive nothing in return. Never accept unsolicited offers to buy outside of eBay no matter how cheap it sounds. If it is too good to be true, then it is.
Fake eBay transaction using Email
This is a variant of the unsolicited offer to purchase an item scam. The scammer will contact you with an offer to purchase an item. Instead of trying to get you to purchase the item off eBay, the scammer will try to win your confidence by running the transaction through eBay. The scammer will claim this will protect both the buyer and seller.
Instead of listing the item on eBay for you to purchase, the scammer will send an official looking email that appears to be a completed transaction on eBay. Satisfied that the buyer is protected by eBay, the victim sends the money to the scammer. Often the email will instruct the buyer to wire money directly to the scammer. Whenever a seller wants you to wire money, it is most likely a scam. Once the scammer has your money, they will disappear.
Always verify eBay transactions on the eBay website. Don't click on any links in the email as the link could point to a spoofed site. Go to the eBay website yourself and enter the item number into the search box. If it is a valid transaction, the appropriate listing will appear.