How to Avoid an Ebay Scam

Ebay, founded in 1995, is one of the most popular online auction and shopping websites. Originally specializing in real-time online auctions, Ebay eventually expanded its operations to online shopping, classified ads, and other ventures. Its popularity rests largely in the market it opens up for its users: buyers and sellers who might normally have never connected can do so through this website. The uses of Ebay vary widely: many content themselves with buying or selling a rare item here or there, while some online entrepreneurs have made a living through the site. Ebay, however, has a dark side. This dark side is the Ebay scam.

There are many different types Ebay scams perpetrated on and by its users. While Ebay claims that only .1% of transactions involve some kind of fraud, it is still something to be concerned about, for the occasional and heavy user alike. This article will describe some of the more common methods, by both sellers and buyers, and will offer Ebay users ways to protect themselves during their transactions.

Fraud by Ebay Sellers

On the one side of the fraudsters are sellers, and the severity of the scam can vary. Their bilking methods are diverse: some sell fake or illegally reproduced merchandise (a very common method, especially with antiques, jewelry, and autographed sports memorabilia); others accept payment for an item that doesn’t exist or is never shipped; some fraudsters sell broken items or items that don’t match the original auction description. Some even sell stolen goods on Ebay. In theory, the feedback system is supposed to protect buyers against fraudulent sellers, but it is not difficult to make a new account, and some Ebay newbies may not use caution when dealing with an unknown seller.

One major class of ebay scam is “shill bidding.” In this method, the seller creates multiple accounts and bids on his or her own auctions (or asks a co-conspirator to do so). This artificially drives up the price of the item, and a unsuspecting buyer may end up paying more for the item than the market actually dictates should be paid.

Fraud by Ebay Buyers

In this class of Ebay scam, the buyer attempts to defraud the seller in a variety of ways. Some abuse the power of Paypal to get refunds for “shipping damage” or other trumped up charges. One significant category of Ebay scams is the “friendly fraud.” In this scheme, the buyer receives the merchandise but then claims to have not received it. They then request a chargeback, and the seller is out of luck no matter what “proof” of receipt he or she might have. Paypal and Ebay are firmly in the buyers’ camp by default (it is good business policy, as much of the initial risk is on the buyer), and thus an honest seller can be rather easily duped by a dishonest buyer.

Other buyer schemes include returning different items or forging “payment received” emails in order to trick an unsuspecting seller.

How to Protect Yourself from Ebay Scammers

One smart rule for both buyers and sellers is never provide your account name, password, and other information to anyone by e-mail. Ebay will never ask for it, and you should be suspicious of anyone who does. Scammers try to gain access to people’s accounts in order to do their dirty work. Also be careful about using any payment method besides Paypal, as money orders, transfers, and checks provide little security for either buyer or seller. In general, do not go outside the Ebay system for communication, payment, purchase, etc., as you are left even more unprotected, and your interactions cannot be traced in case of fraud.

If you are a seller, there are a number of things you can do to protect yourself. Never ship out an item without receiving an official e-mail from Paypal and checking to make sure your account has been credited for the sale. Never take an auction out of Ebay, despite the wishes of a potential buyer, as this could leave you more vulnerable to fraud. When shipping out your item, consider getting signature delivery confirmation if you cannot afford to be scammed with an expensive item. While this is not foolproof, it can help you in case of a chargeback dispute. Finally, for especially valuable items, consider using a third-party escrow service to facilitate the transaction. Be mindful, however, of fake escrow companies and e-mails.

For buyers, use your instincts. If you are getting a ridiculous deal on an item, especially through the buy-it-now option, you may be getting scammed. If you are buying collectibles, like autographs, it is probably best to avoid Ebay, as verifying their authenticity is challenging, regardless of any alleged “proofs” the seller may offer. In this case and for other cases concerning valuable items, you might be better served making a purchase in person or on another site.

If you are scammed, make sure to report it to Ebay and Paypal, and even the police if the fraud is severe enough. Provide all the evidence you can to support your case. If you've prepared yourself for this eventuality, you should escape financially unscathed.

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Comments 3 comments

Ulf Wolf 6 years ago

Great post.

Perhaps I can just add to this that the best way to guard against being ripped off by online sales or auctions of any kind, Craigslist and eBay included—and whether seller or buyer—is to use a *bona fide* online escrow company. Especially for pricier items like antiques, jewelry and autos. Although it does add some cost, it takes the uncertainty out of the transaction, and that’s a small price to pay for peace of mind.

For my money, the best bona fide online escrow (and there seems to be ten fraudulent escrow sites for every bona fide one) is probably Escrow.com (http://escrow.com). In fact, it’s the only one that eBay recommends, and is the only online escrow company that is licensed to provide escrow services all across the United States.

Take care,

Ulf Wolf


ayrtzk 5 years ago

Anybody who lost money on Ebay should report it as loses then fill tax declaration.


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Shushanik 4 years ago from San Francisco Bay Area

I've become a victim of ebay triangulation scam :( Wrote a hub here about my sad experience: http://hubpages.com/technology/Why-You-Should-Neve...

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