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Safety at Auction and Classifieds Sites

By Michelle Hainer

A few summers ago Christie Cambio, of Rochester, New York, just wanted to keep costs down on a trip she and her husband were planning to Walt Disney World. So when she logged onto eBay and saw that someone was selling pricey Park Hopper passes -- tickets that allow unlimited access to all of Disney's parks -- at a discount of almost $300, Cambio immediately placed a bid. "I never for a minute thought that it was a bad idea," she recalls.

She won the passes, and when the tickets arrived in their official looking package, complete with the Disney logo, she assumed she had successfully saved a few dollars. Then they got to Florida and tried to use them. "I put my card into the turnstile and a big red X appeared," says Cambio, whose husband's pass was also declined. "That's when we were like: 'Uh oh.'"

"Uh oh" is right. The Cambios were the victim of an online con artist who had knowingly sold them stolen merchandise (which is why the passes were vetoed at the gate). Luckily the Cambios weren't held responsible by the theme park. Whether you're buying or selling via web sites such as eBay or Craigslist, scams like this can happen if you're not careful. Here's what you need to watch out for and how to avoid getting duped.

1. Guard your personal information
Even if you're selling an item, you can be scammed, too. "If you get an email asking for your full name, address, phone number or anything financial, it's a scam," says Aliza Sherman-Risdahl, author of Cybergrrl: A Woman's Guide to the World Wide Web (Random House), and most recently, The Everything Blogging Book (Adams Media Corporation). Sherman-Risdahl speaks from personal experience. When she posted a hot tub for sale on Craigslist recently, a potential buyer emailed her requesting personal details. She declined and the sale was off. "No trustworthy merchant or buyer will ask for confidential information through email," she says.

2. Know your buyer and sell locally
If you're selling an item on a classifieds site and have an interested party, check that their name, address and phone number are valid. (A basic search on the Whitepages web site or the Switchboard web site is a good way to do this.) If possible, try to deal with local buyers. This way, you can perform the exchange in person -- and leave with the cash in your hands, not theirs.

3. Never agree to unusual payment deals
The objective of any scam is to catch you off guard.  Here's one popular con that is often used in situations where people sell their own goods.  It goes like this: A buyer writes you a fake cashier's check for an amount well over your asking price. Next, the buyer claims he made a mistake, and asks you to instantly refund him the difference through an online payment service, such as PayPal. Being the nice person that you are, you agree, and later learn that the so-called cashier's check bounced -- leaving you out a significant chunk of money for the "refund," plus the item you already "sold" to the con artist. If a buyer refuses to give you payment for the correct amount, don't release the merchandise.

4. Scrutinize the online payment service
Before using an online payment service, such as PayPal or Escrow, read their terms of agreement carefully. You want to find out if the company offers any recourse for buyers and sellers who end up involved in transactions that go sour. Also, examine the web sites with a critical eye. Be wary of sites that are poorly designed, have spelling or grammatical errors, or claim to be affiliated with the government. Cambio says that after being denied access to the park, she called the online payment service she'd used to pay for the passes. "No one was helpful," she says. "The customer service rep kept muttering something about a claim form and a 30-day waiting period. But I wanted my money back right then!"

5. Always pay by credit card
To protect yourself further, only pay with a credit card that comes with a "chargeback" feature. This virtually guarantees that your money will be refunded. That was how Cambio finally got her $465 refunded. That said, had she known about the chargeback feature sooner, she could have saved herself five months of aggravation. "The call to my credit card company was the most painless part of the whole process," she says. (After she contacted them, there was an investigation of the incident before the money was refunded.) Also, never use your bank debit card to pay for an item you purchase online because doing this means you are essentially paying with cash. "Debit cards tap into your actual bank account," Sherman-Risdahl says. "You'll have little protection if the money is stolen."

6. Fight back
If you think you may have been the victim of an online auction or classifieds scam, or suspect that an item posted on an online auction site may be fraudulent, report it. On eBay, you can go to its Security & Resolution Center to file a complaint. Or on Craigslist, click the "Help" link and go to the "Abuse, Legal Issues" section. You can also call the Federal Trade Commission's toll free hotline at 877-382-4357 or log onto the FTC web site to fill out a complaint form. The Internet Crime Complaint Center web site can also help you report frauds.

Either way, the faster you act, the better your chances of recovering your loss. The Cambios, for one, were lucky their situation had a happy ending. And while they have vowed to swear off online auction sites for good, the temptation remains. "My husband was on eBay the other day and saw tickets to a football game he really wants to go to," she says. But if you play it smart, you don't have to avoid online classifieds and auction sites altogether -- just be cautious and keep your guard up.