Things to take note to prevent E-Auction Fraud when a consumer participating in an e-auction

Auctions are a market mechanism by which a seller places an offer to sell a product and buyers make bids sequentially and competitively until a final price is reached. Electronic auctions (e-auctions) are auctions conducted online.

Among all e-commerce activities conducted over the internet, fraud is most serious in e-auctions. The largest internet auctioneer, eBay, has introduces several measures in an effort to reduce fraud.
The following are some of eBay’s antifraud measures:

~User identity verification

eBay uses the services of Equifax to verify user identities for a $5 fee. Verified eBay User, a voluntary program, encourages users to supply eBay with information for online verification.

~Authentication services

Product authentication is a way of determining whether an items is genuine and described appropriately.

~Grading services

Grading is a way of determining the physical condition of an item, such as “poor quality” or “mint condition”. The actual grading system depends on the type of item being graded. Different items have different grading systems.

~Feedback forum

The eBay feedback forum allows registered buyers and sellers to build up their online trading reputations. It provides users with the ability to comment on their experiences with other individuals.

~Insurance policy

eBay offers insurance underwritten by Lloyd’s of London. Users are covered up to $200, with a $25 deductible.

~Escrow services

For items valued at more than $200 or when either a buyer or seller feels the need for additional security, eBay recommends escrow services. With an easy-to-access link to a third-party escrow service, both partners in a deal are protected.

~Nonpayment punishment

eBay implemented a policy against those who do not honor their winning bids. To help protect sellers, a first-time nonpayment results in a friendly warning. A sterner warning is issued for a second-time offense, a 30-day suspension for a third offense, and indefinite suspension for a fourth offense.

~Appraisal services

Appraisers use a variety of methods to appraise items, including expert assessment of authenticity and condition and reviewing what comparable items have sold for in the marketplace in recent months.

~Verification

One way of confirming the identity and evaluating the condition of an item is through verification. With verification, neutral third parties will evaluate and identify an item through a variety of means.