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Online Auction
Fraud Complaints Still Rising, Says Consumer Watchdog
Auction Giant eBay Severs Relations with Internet Fraud Group
Release Date: March 31, 2004
Contact: 202-835-3323,
media@nclnet.org
WASHINGTON
, D.C. —Today the National
Consumers League (NCL) released its annual list of Internet Fraud
complaints to its Internet Fraud Watch (IFW) program. Reports of
Internet fraud continue to rise last year, from 36,802 in 2002 to 37,183
in 2003, and once again online auctions topped the list. The total
monetary loss reported to the IFW jumped from $14,647,937 in 2002 to
$17,109,441 in 2003, with the average consumer loss rising from $468 to
$527.
The number of online auction complaints
would have been even higher if online auction giant eBay had not removed
the long-existing hyperlink from its site to NCL’s Fraud.org Web
site sometime last fall, said Internet Fraud Watch Director Susan Grant.
The result of severing that link for consumers was devastating to IFW
reports; auction complaints dropped from an average of 3,481 per month
in the first nine months of 2003 to 644 per month during the last
quarter. If eBay had not taken that action, NCL estimates that the IFW
would have received at least 8,511 more auction complaints in 2003.
For at least five years, eBay provided a
link from its Web site to NCL’s anti-fraud program, along with links to
other organizations and agencies. This enabled consumers to easily get
to IFW to make complaints about auction problems. Last September, NCL
noticed a sudden decline in online auction complaints reported to the
IFW and discovered that the link from eBay was gone. eBay has declined
to restore it.
“It’s never easy for a business to
acknowledge that its services may be abused for fraudulent purposes.
Unfortunately, eBay is resorting to shooting the messenger,” said IFW
Director Susan Grant. “eBay has admitted to me that it is unhappy with
the work we do to raise public awareness of online auction fraud. Making
it more difficult for consumers to report problems with auctions may be
eBay’s PR solution — but it certainly isn’t one for its consumers.
Downplaying problems in online auctions won’t make them go away. eBay
has done a terrible disservice to both consumers and the law enforcement
agencies who try to help them.”
“This doesn’t just affect our statistics,”
Grant said. “eBay’s refusal to restore the link means that the law
enforcement agencies on our electronic alert system are receiving fewer
complaints from auction fraud victims."
Online
Auctions Remain Top Complaint in 2003
Online auctions accounted for 89 percent
of complaints to the IFW in 2003; adding 8,511 more auction complaints
would raise that percentage to 91. The other categories in the top five
Internet frauds were General merchandise sales (5 percent); Nigerian
money offers (2 percent); Internet access services (1 percent); and
Information/adult services (1 percent).
2003 Top Ten Internet Frauds
(click on links to get to scam tips)
-
Auctions
-
General
Merchandise
-
Nigerian
Money Offers
-
Information/Adult Services
-
Internet
Access Services
-
Computer
Equipment/Software
-
Work-at-Home Plans
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Lotteries
-
Fake Checks
-
Advance Fee
Loans
For the first time ever, NCL calculated
the numbers of victims relative to the populations of the states in
which they live. The top victim states were
Alaska (60 complaints per 100,000
residents), Hawaii (21
complaints per 100,000), Washington
(15 complaints per 100,000), Wyoming
(15 complaints per 100,000), and Rhode Island (15 complaints per
100,000). “The Internet is a wonderful tool that has the potential to
make connections between people from anywhere in the world.
Unfortunately, some of those connections are between victims and con
artists,” said Grant. “As long as you have an Internet connection,
you’re not safe from fraud—no matter where you live.”
Online
Auction Safety Tips from NCL’s Internet Fraud Watch
-
Check the seller’s track
record. Some auction sites provide feedback about other people’s
experiences with sellers. The state consumer protection agency and the
Better Business Bureau where the seller is located may also have
information about complaints.
-
Don’t assume you’re
automatically protected. Some auction sites and online payment services
provide insurance, others don’t. Read the terms and conditions carefully
so you understand what’s covered and what’s not.
-
Pay by credit card. Under
federal law, you can dispute the charges if the seller never delivers or
misrepresents the goods.
-
Look for other options to
protect yourself. Some sellers are bonded through programs that have
investigated their business backgrounds and credit histories and
guaranty your money back if they don’t fulfill their promises. Click on
the program symbol to learn how it works and verify that the seller is a
member in good standing. Escrow services, which take your payment and
forward it to the seller once you confirm satisfactory delivery, may be
helpful for expensive purchases that aren’t covered by insurance or
bonding.
NCL provides more tips, statistics for
2003 and previous years, and an online reporting form at
www.fraud.org
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