Beware of Online Product Scams

Trying to get the best price for an online purchase might get you ripped off. Here's what to watch out for before making a buy.
Magazine Contributor
5 min read

This story appears in the October 2003 issue of Teen Startups. Subscribe »

My eyes lit up as I found a whopping deal while searching for a new Canon XL1S video camera for my stock footage company. There I was on ready to purchase the camera for $3,800 retail when I saw a link to their "Used & new" section advertising a price as low as $1,700 from a ZShops seller.

The seller's listing described the camera as an unopened gift that he had no use for. It included all the equipment that would be included with a retail purchase, including the manufacturers warrantee. Jackpot!

Knowing that Amazon insures buyers for purchases from their users for transactions up to $2,500, I quickly clicked the "Add to cart" button before my wonderful deal could be snatched up by someone else. How could I go wrong?

An error message from Amazon popped up saying the item was no longer available for sale-yet there it was on the site begging for a purchase. So I e-mailed the seller, who claimed to be in New York, and asked him if the camera was still available, telling him I wanted to purchase it through Amazon.

The seller quickly responded saying that he "could no longer sell through Amazon because he had sold too much recently and they had quotas." Quotas? First red flag. However, I still really wanted the camera so I said I'd pay him through PayPal, which also protects buyers from fraud.

He responded saying that he didn't use PayPal because he had gotten his credit card number stolen through the hacking of PayPal years ago and was afraid it might happen again. Instead, he preferred that we use an escrow service that would allow me to pay a third party and look over the camera before authorizing the escrow company to send the money to the seller.

Using an escrow service sounded like a good idea, but I'd never heard of the company he wanted to use: Upon examining the site, it looked legitimate and the seller had a good feedback rating. However, the company claimed to be located in Italy, which was strange because the seller was from New York. Red flag #2.

Wary of dealing with an escrow service in another country, I went ahead and checked the TrustE certificate with the database of registered TrustE companies, (with which they claimed to be a member), and didn't show up. Red flag #3.

Out of curiosity, I then visited, the legitimate service that I've always used to see if was simply a copy of the site. It wasn't-but I dug a little further and read the privacy statement on both sites, and bingo: exact match. I dug around some more and found that all the information on, minus site design, was duplicated from Final red flag-this wasn't a deal, it was a scam.

I e-mailed the seller calling him on his scam and never heard from him again. Big surprise. However, the next day the exact same listing showed up on Amazon with the same description and everything, but it was a new seller with a new e-mail address out looking for new prey.

So I went back to (after notifying them of the scam, to which they replied that they basically didn't care) and pulled up the camera again to buy it off the site for that heavy retail price of $3,800. But once again I was lured to the "Used & new" section which now showed multiple listings. Looking past my $1,700 scammer friend, I eyed a listing that offered a camera "barely used in perfect condition" for $2,000. Wow! $1,800 in savings! Click-I added it to my cart but again got that same error saying the item wasn't available. Another possible scam?

Of course I immediately e-mailed the seller dying to know how he was going to lure me off the site to perform a private transaction. "How in the world can you offer this great camera so inexpensively?" I asked. "Well, to be honest, I run a pawn shop and some 18-year-old kid brought it in here for $700. I checked it out with the FBI and it isn't a stolen item, so I'm just trying to get rid of it for a nice little profit."

Interesting story, and I would have been willing to accept it if the seller would have let me pay him through Amazon or Paypal-but he wouldn't take anything but a check or money order. No chance.

The point of this story is to illustrate how extremely important it is keep online transactions within the institutions that you know and trust and, more important, that offer buyer protection., eBay, Yahoo! Shops and PayPal all offer this protection, but scammers are getting good at luring wide-eyed bargain hunters away to private transactions that offer no security. Some eBay users are being contacted by "trusted sellers" with high feedback ratings once they bid on high-ticket items, such as plasma TVs, and offered the same product at a drastic discount. The problem is that these trusted sellers are actually scammers who have stolen eBay accounts.

Just remember: If it seems too good to be true, it probably is.

Joel Holland, 18, has been starting and running businesses since he was 12. He's currently the Chief Marketing Officer for Nortel Networks Kidz Online, as well as the producer of Streaming Futures, a national teen career show dedicated to helping teens choose the right career path. Holland is ranked in the top 10 nationwide for his marketing skills through DECA, a national organization with more than 300,000 teen members, and was named Business Student of the Year by the McLean, Virginia, Chamber of Commerce last year.

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