Tips on How To Be Safe When Buying at an Online Auction

How can users determine whether an online payment or escrow service is legitimate? Thompson says that although there are no guarantees, a little advice and awareness can go a long way. She recommends that consumers: Read the service's terms of agreement. If it's an online payment service, find out: whether it offers buyers any recourse if sellers don't keep their end of the bargain. whether it prevents sellers from accessing their funds if buyers are not satisfied with the product. who pays for credit card charge backs or transaction reversal requests. If the online payment service cannot recover the loss from the seller, it might try to recover the loss from you, using the credit card or bank account information on file. (Some experts say you should consider reserving a credit card, stored-value card or bank account for online transactions only.) Examine the online payment or escrow service's privacy policy and security measures. Never disclose financial or personal information unless you know why it's being collected, how it will be used, and how it will be safeguarded. Check out the online payment or escrow service's Web site. A site of poor quality with, say, misspelled words or claims that the service is affiliated with the government, is suspect. Call the customer service line. If there isn't one - or if you call and can't reach someone - don't use the service. Find out how the online escrow service processes transactions. Avoid sites that don't process their own, but rather require users to set up accounts with online payment services. Check with the Better Business Bureau, state attorney general or consumer protection agency where you live and where the online payment or escrow service is based to see whether there are unresolved complaints against the service. Be aware that a lack of complaints doesn't necessarily mean that a service has no problems. If you encounter problems after you've signed up with an online payment or escrow service, try to work with the seller, buyer or site operator first. If that doesn't work, file a complaint with: the attorney general's office in your state. your county or state consumer protection agency. Check the blue pages of the phone book under county and state government. the Better Business Bureau. the FTC. Use the Web site www.ftc.gov or call toll-free 1-877-FTC-HELP (1-877-382-4357). The FTC's booklet Internet Auctions: A Guide for Buyers and Sellers offers additional advice on how to avoid auction-related fraud. Michael Mangin, who says he was defrauded by an online escrow service, says he erred by not heeding his instincts and checking out the service thoroughly before sending payment. But, he says, he won't let the experience keep him from participating in online auctions in the future. "Now I know what to look for," he cautions.

 The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Source: FTC