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Don't fall victim to fraud on eBay. Prevent eBay and internet fraud by using our tested free safety tips.

This is a sample chapter from my latest book, Three Weeks to eBay Profits

eBay is actually very safe and can be perfectly safe if you follow our tips. Don't be stressed out by all of this. They may look complicated or too much to remember, but once you read them you will see that it is mostly common sense and the tips are very easy to follow. Remember - the internet in general is much more dangerous than eBay when it comes to fraud.

Follow these tips whenever you buy anything on the Internet --not just eBay.

Compared to the rest of the Internet, eBay is actually one of the safest venues for online buying and selling. Fraud is quite rare and affects a tiny fraction of the millions of dollars of business done on eBay every day. Nevertheless, with 85 million potential buyers, eBay does attract its share of online criminals—dishonest people bent on stealing your money any way they can. Below are some strategies you can use to ensure a safe buying and selling experience.

The Safe Way To Buy on eBay

The most common type of fraud on eBay occurs when someone sells an expensive item that he doesn’t possess and/or has no intention of delivering. For example, let’s say you have been looking at one of those new Hitachi plasma TVs that sell for over $4,000. You see one from a seller for under $3,000 and you bid on it. You send the money and the TV never arrives. A week later you e-mail the seller and get no reply. When you check the seller’s account on eBay, it has been terminated. Your money is gone and so is the seller.

While this scenario may sound frightening, this type of fraud is easily prevented if you follow these simple steps:

1. Check the Seller’s Feedback

eBay’s feedback score on other members can tell you a lot about the sellers with whom you are considering doing business. Look at an eBay member’s username; a number in parentheses immediately follows it. That number is that member’s unique feedback score. Click on that number and you will see a report like this:

eBay Feedback Report

Below the score is the number of users who left positive comments and the number who left negative ones. The next line reveals the total number of positive feedback left. Note that this aggregate number is higher than the positive feedback number above it. This is because eBay only counts positive feedback once from any given member. So the difference between these two numbers represents the amount of transactions that were from repeat buyers. The fact that over five hundred people came back to buy from this seller inspires confidence in his past performance.

If you are buying a T-shirt or a coffee mug for $20, the chance of out-and-out fraud is pretty slim. Most fraudulent sellers focus on items with high values, such as diamond rings or plasma TVs.

So I wouldn’t hesitate to buy a low-cost item from a seller who may have a low feedback score as long as it is primarily positive. If you look again at the illustration, you can see that eBay displays the actual comments that buyers left. If someone has recently received negative feedback, I sometimes scroll down the page to read the actual comment.

2. Don’t Buy Expensive Items from New Sellers

If you look at the top, –right-hand section of the illustration, you can see how long a member has been registered on eBay and the member’s ID History. It also shows you where the member is registered. Most fraudulent transactions are by sellers who have been registered for less than thirty days. I would be very hesitant to bid on or buy an expensive item from a brand-new seller. If you are considering bidding on an item, you can also click on the link that says ID History. This page will show you if the seller has changed her username since she registered.

3. Never Send Cash, a Money Order, or a Certified Check for an
Expensive Item

Most legitimate sellers accept PayPal and/or credit cards as payment methods. There are a few sellers who demand money orders or certified checks, but they are in the minority. Only if a seller had a high positive feedback rating—and had been selling on eBay for at least a year—would I consider this type of payment. However, I would first look to see if the same item was available from another seller who did accept PayPal.

New to eBay? .....PayPal is eBay's payment system. If you are going to buy or sell on eBay you should sign up for PayPal. It allows you to pay sellers safely without sending your credit card or bank information over the web. PayPal also offers a buyer protection program.

4. Always Ask Sellers for a Tracking Number or Delivery Confirmation

UPS and other shipping services track all packages to their destinations. Similarly, the US Postal Service offers delivery confirmation. Positive tracking prevents a seller from claiming he sent a package when he actually did not.

5. Make Sure You Pay the Correct Seller

In another popular scam, an eBay member monitors auctions for expensive items during the final few seconds of bidding. When a bidder wins an auction, this unscrupulous person sends her an immediate e-mail requesting payment. The responsible bidder pays right away –only to later receive a payment notice from the legitimate seller. To avoid this scenario, before sending a PayPal payment for an expensive item, I always check the username of the person I am paying to make sure it’s the same as that of the person who sold me the item.

Another variation on this scam is an e-mail that arrives from a purported eBay seller demanding immediate payment for an item you bought—or else the “seller” will report you to eBay and leave you negative feedback. You panic and send him the money, only to realize later that you never bought anything from that seller.

6. Read the Auction Description Carefully

One recent scam involved some sneaky members selling the empty box that the popular Microsoft® Xbox game system came in. The auction description would describe the Xbox system in great detail with lots of photos. Unfortunately, buried in the text was the statement “you are bidding on the box only.” Buyers reading this line assumed that, by “box,” the seller was referring the Xbox—when, in fact, the seller was only offering the empty box in which the product was originally packaged.

7. Make Sure You Are Buying Authentic Products

Unfortunately, there are a lot of knockoffs and outright counterfeit items for sale on eBay. eBay aggressively polices this through their Verified Rights Owner( VeRO ) Program , but eBay can’t catch everyone. If you are bidding on a brand-name item, such as a Rolex watch or a Prada handbag, this is another situation where you might want to check the seller’s feedback and ID history very carefully. If the seller is selling the item too cheaply --then there is a good chance its a fake.

8. Report Suspicious Auctions to eBay

If you come across an auction that looks suspicious –such as a seller from Taiwan who has only been on eBay a few weeks selling an expensive piece of jewelry and demanding cash as payment—take action. In this situation, you should not only refrain from bidding on the item, you should click on the link at the bottom of every auction that says Report this listing to eBay. Upon receiving the report, eBay’s Trust & Safety department will examine the listing and cancel it if they think it may contain a high risk of fraud.

9. Safeguard Your Registration Information and Password

Phishing is jargon for sending out spoof e-mails designed to lure recipients into entering their eBay passwords and credit card information into spoof Web pages that look just like the PayPal or eBay sites. To avoid falling victim to these online predators, remember a couple of simple pointers: Neither eBay nor PayPal will never send you an e-mail asking you to click on a link to update your account information. Legitimate e-mails will always be addressed to you by name and will direct you to the eBay or PayPal homepage to log in as you normally do.

10. Evil Twin

A more recent method of stealing your personal information is the “Evil Twin.” This scam takes advantage of wireless connections in airports and coffee shops. The Evil Twin is essentially a wireless version of a phishing scam—you think you’re connecting to a genuine hot spot, but are actually connecting to some guy with a laptop and a wireless network card sitting perhaps a few feet away. Because he is closer to you than the base station, you might actually log onto his network instead.

Once you are logged on, the thief can capture a record of your keystrokes. Therefore, you want to be careful of entering personal information such as passwords and credit card information when you are on one of these networks.

11. Pay with PayPal or Other Secure Methods

For items covered by PayPal’s Buyer Protection Program, your purchases are protected against fraud—including sellers that do not deliver your merchandise as promised, or delivered items that differ significantly from the auction description—up to $1,000.00. (See for more information.) Also, investigate any protection policies your credit cards may offer.

Seller Safety Tips

Like buyers, sellers can also fall victim to scams such as phishing and the Evil Twin. However, other scams specifically target eBay sellers.

1. Counterfeit Certified Checks and Money Orders

This is a larger problem when receiving payments from overseas. American criminals rarely use this method because it is a federal crime and carries very serious penalties. Whenever I receive a money order, I cash it instead of depositing it into my bank account. That way the responsibility for determining the money order’s authenticity falls with the post office or whoever cashed it. I never ship the buyer’s goods until I have the cash in my hand.

Certified checks are slightly more problematic. If I receive a certified check (also know as a bank check), I take it to my bank and ask a representative to contact the issuing bank to determine if the check is good before I deposit it. This usually takes about twenty-four hours. If the bank says the check is good and it turns out to be counterfeit, then it becomes the bank’s problem—not yours.

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2. Always Ship Using a Service That Provides Tracking

Just as some sellers will claim they shipped your unreceived item, there are some buyers who will claim they never received their item and demand a refund or a replacement. That’s why I usually ship with a service such as UPS or FedEx that provides positive tracking for all packages. If the item I am shipping is expensive, I check the box on the shipping form to require a signature upon delivery. Whenever I ship via USPS, I always opt for delivery confirmation, which is the USPS tracking service. If you insure the package with the US Postal Service, then it is signed for at each step of the way. You don’t get a signature from the customer, but the postal carrier who delivers it signs a form certifying the delivery.  

3. Carefully Select the Locations to Which You Will Sell

I have been selling internationally for several years now, but there are some countries I simply will not sell to because fraud is so rampant. Chief among those are Russia, Thailand, and Nigeria. When you launch an auction on eBay, there is a form that comes up where you can select the countries or parts of the world where you will do business. Until you gain some experience, I would limit your sales to the United States and Canada. Later you may want to add European nations and Australia.

4. Use a P.O. Box or Postal Service as Your Registered Address on eBay

Once you conduct a transaction with someone, she can find your address within the eBay system. As I mentioned, I once had someone who purchased an item from me show up at my front door. It’s generally not a good idea to have your home address available anywhere on the Internet if you can help it.  

5. Take Detailed Photographs of and Insure Expensive Items

There are some unscrupulous buyers who receive something and then decide they didn’t really want it. So they may break it or put a scratch on it and then demand a refund. If the item is insured and the buyer breaks it, you can simply file an insurance claim and the insurance company will take over from there. The company will almost always investigate the claim, especially if the item was expensive. If the buyer put a scratch on the item or otherwise damaged it, you will have a photograph to prove it was fine when you shipped it.




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