Advice
Listed below is advice on how to keep safe in a online auction.
Advice from the DTI
Do not trade outside of the internet auction site
Do not be tempted to trade with someone who contacts you and invites you to trade off the internet auction site. Fraudsters try to lure bidders off legitimate auction sites by offering to sell the 'same' item for the same or a lower price. But if you buy off-site, you lose any protections the site may provide. A significant proportion of internet auction fraud occurs this way.
Watch out for fake escrow services
Many sites offer escrow services where, for a small fee, the escrow service acts as a neutral third party in the trade. It will hold the buyer's payment and forward it to the seller when the buyer receives and approves the item within an agreed period.
While genuine escrow service can reduce the risk of fraud, bogus escrow services do advertise on the net. Such bogus services fail to pass the money to the seller and the victim finds he is unable to trace them. Alternatively fraudsters contact losing bidders on a genuine auction, claiming to be in a position to sell a similar product. The fraudster will insist on payment through an escrow service and then take the money without delivering the goods.
Don't bid too high
Sellers can get their agents to bid on items to artificially raise the price. Protect yourself by doing some research on what you think an item is worth and decide on your maximum bid.
Here are some specific things to look out for.
Check out the website
You will need to register on the site before you can buy or sell. Make sure you read all the information before agreeing anything.
What protection does the site offer if a transaction goes wrong? Remember the site provider can refuse to accept responsibility if a trade goes wrong because of a trader's action.
Many sites do provide users with limited compensation in some instances and also access to dispute resolution schemes but be clear what is being offered.
Check out the seller or buyer
Most auction sites operate a feedback system which allows you to see comments by other users who have traded with that person. Check the person's rating and read the comments. If you see bad comments consider carefully whether or not to trade. Check out where the trader is based, how easy would it be to get your money back if things went wrong?
Check out the item you are buying:
- ensure the description of the item is adequate
- don't be afraid to ask questions before bidding if you are unsure of something, an honest seller will be happy to clarify
- do some research and work out what would be a fair price for the item
- set yourself a maximum bid and stick to it
Make sure you know:
- how much is the postage
- will the item be insured
- is it being sent from overseas
- are your credit card details kept secure
- what form of payment will the seller accept.
Payments
Paying by credit card can in some circumstances offer additional protection. So does payment by escrow service, where a trusted third party holds the money until the goods are received.
Internet auctions - your legal rights
The majority of internet auction sites are not auctioneers, they just provide the venue for auctions to take place. Accordingly, your rights regarding your dealings with the site (for example, the terms and conditions you sign when you register), are likely to be the same as when internet shopping generally.
It is important to know whether you are buying from either a private seller or a trader who is acting as a business. You have fewer rights when buying from private sellers. Items might not have to be of satisfactory quality but must still be as described.
When buying from persons acting as a business you still have other rights:
If the sale is an auction sale, you don't have a right to cancel. If the sale is an 'instant win/buy now' sale, you will have cancellation rights, but only when the seller is acting in the course of a business. If in doubt ask the seller whether he offers cancellation rights.
What to do if you have a complaint
If you have a problem with something you bought at an internet auction, firstly try to resolve the dispute directly with the seller. If you can't, or if the seller is not contactable, see if the auction site has dispute resolution procedures that can assist.
The OFT will consider complaints from consumers about traders, but please note that we are unable to seek redress or compensation for individual cases.
The OFT can't advise you about your particular disputes, but OFT Enquiries can provide guidance on whom to contact for help. You can contact them on 08457 22 44 99, or email enquiries@oft.gsi.gov.uk
