Auctions are common in markets where the goods sold are valuable (for example, arts) or when their prices can't be easily determined. The process of an auction aims to find a fair price for the goods by identifying buyers who need them the most. It is actually a market mechanism where buyers make bids and sellers place offers to sell the products.
There are few types of e-auction fraud and it can be conducted by sellers or buyers.
1) Bid shielding (buyer’s action)
2) Shilling (seller’s action)
3) Fake photos and misleading descriptions
4) Improper grading techniques
5) Improper grading techniques
6) Selling reproductions (seller’s action)
7) Loss and damage claims (buyer’s action)
8) Failure to ship merchandise (seller’s action)
It is important for those consumers to be aware of the e-auction frauds and know how to protect themselves. Here are some steps to take note to prevent e-auction fraud :
1) Insurance Policy – For instance, eBay which is the Internet auctioneer offers insurance underwritten by Lloyd’s of London. A program is provided with no cost to the eBay users.
2) Authentication service – If the products are defective or fake, product authentication is needed. Authentication is difficult since it relies on the expertise knowledge of the authenticators. It depends on their training and experience to detect those counterfeits.
3) User identity verification –For example, verified eBay user, the voluntary program, encourages users to supply eBay with information for online verification by offering their driver’s license number or date of birth.
4) Feedback Forum - The buyers and sellers are allowed to build up their online trading reputations. The users are able to comment on their experiences with other people.
5) Nonpayment punishment – There is a policy against those who do not honor their winning bids, which is a friendly warning will be given for the 1st time nonpayment. For second time, a sterner warning is issued. Third offence will be a 30 day suspension while an indefinite suspension is for a fourth offense.
6) Verification - With verification, neutral third parties will identify and evaluate the condition of an item through various methods. For instance, some collectors own their item “DNA tagged” for identification purposes and it provides a way of tracking an item if it changes ownership in the future.
7) Appraisal services – These services include expert assessment of authenticity and condition and reviewing what comparable items have sold for in the marketplace. An appraised value is usually accurate at the time of appraisal but may change over time as an item becomes more or less popular in the marketplace.
In addition, here are a few things need to take note of when a consumer participating in an e-auction to avoid e-auction fraud.
- First, buyers are advised to check the seller’s reputation before purchase by checking the sellers’ feedback. This is quite important because it allows the buyers to voice out their comments or feedbacks about the products to let others be aware of the fake sale.
- Secondly, many sites provide buyer protection, for example courier delivery. Therefore, in cases where you don’t get what you pay for, you can always get a refund fro
m the website.
- Thirdly, buyers should use a credit card because credit card payment can protect them by disputing the charges if the goods are misrepresented or never delivered. They could cancel the card immediately if there is suspect fraud.
- Last, buyers also have to be aware of those fake accounts. Sometimes, some sellers attempt to drive up the price of their own auctions.
^^Here are the links where you can get more information about this topic :
http://wps.prenhall.com/wps/media/objects/260/267260/online_appendices/Turban-Appendix2A.pdf
http://www.usatoday.com/tech/columnist/2002/05/07/yaukey.htm
0 comments: