Payment and Bidding Fraud
Okay, you've decided to buy widget A from seller B, or sell widget X to buyer Y; now how do you assure a safe and successful transaction? Unfortunately, there are just as many bidding and payment scams out there as phishing tactics. Some favorites:
Shill bidding: Bidders in collusion with the seller bid items up artificially. They may also bid high to discover your maximum bid, then retract it and bid just below your top price, forcing you to pay more than you should. eBay's practice of hiding bidder IDs on big-ticket items--while it reduces the number of e-mail messages from scammers to bidders--also makes it harder for users to investigate other bidders and protect themselves against this practice.
Bid shielding: A ring of bidders drives up the price early in an auction to scare off other buyers, then retracts bids at the last minute, allowing a low bid to win the auction.
Fake second-chance offers: If you lose an auction, you may get a legitimate second chance to buy the product if the high bidder backs out, or if the seller has multiple items. Scammers take advantage of this phenomenon and send bogus offers to the second-highest bidder in an auction, collecting their money and not sending the product.
Switch and return: Buyers receive your genuine item, switch it with a fake, and then return it for a refund.
Stolen credit cards: Any auction can be the target of a buyer with a stolen credit card, but overseas buyers of high-ticket items asking you to ship via overnight service are almost surely scammers. They may be using a stolen credit card or a hijacked PayPal account.
Refund-the-difference scams: Buyers send you a larger check or money order than the amount of your item, and ask you to refund the difference. The odds are about 100 percent that the check is counterfeit and you will be out both your merchandise and the money you refunded.
Wire-transfer black hole: The seller requires payment via wire transfer, often to an address overseas. The odds of you actually seeing your merchandise after sending a wire transfer are slim. And eBay has eliminated its former purchase protection policy. Only PayPal still offers any form of buyer protection.
Triangulation: This combination of stolen credit card use and account hijacking scams is perhaps the most insidious of all, with three victims. A scammer takes over victim A's eBay account. He then sells victim B an expensive item and collects payment. He orders the item from a site like Amazon with a credit card stolen from victim C and has the merchandise delivered to victim B. The scammer is long gone with the money before eBay, Amazon and the credit card company start coming after victims.