Auctions —live and online, estate and online “government” sales — can be a great way to buy an expensive item at a significant discount.
It’s the promise of a “good deal” that draws interest. At least that’s what scammers hope.
If you’re a regular participant in online auctions you probably know there is a need to be careful. Scammers have a lot of tricks up their sleeves.
More: Money lost from this type of scam went up by 88% in the past year
So, here are words of caution to “know before you go.”
It’s best to know the legitimacy of the people you’re dealing with.
Banking on your desire to win that coveted item, scammers may try to hustle you with “entry fees” or “pre-bid deposits”. Here is where you take your time and do your best to determine that there is actually an auction and that the items being sold are real. When you see an ad for a website auctioning cars, motorhomes, boats, and other big-ticket and luxury items and then you visit the website, that’s no guarantee you’re in safe water.
When you register to bid you need to be extremely cautious if you are required to send the auctioneer a copy of your driver’s license and other sensitive personal information.
How do you get scammed? After you bid and the auctioneer gives you instructions on how to transfer the money. Once you’ve paid, the auctioneer disappears and becomes impossible to contact. The item you won is never delivered.
Unfortunately, you just gave money and your personal information to a crook.
To avoid getting ripped off
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Research auctions and auctioneers before participating. If an auction claims to be a “government” auction, reach out to the branch of government hosting the event to make sure it’s legitimate. If you’re looking at a private auction or an auction run by a private company, look into the auctioneer ahead of time. Look carefully at reviews from previous buyers. Does the auctioneer have a good reputation? Do they have the appropriate licensing to conduct the auction? If the answers are “no,” or there is no information available about the auctioneer, it is best not to participate.
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Get to know the terms and conditions of the auction. Find out whether there are entry fees, winning bidder fees, taxes, or shipping costs you’ll be responsible for paying. Winning an auction may not be as simple as paying the price you offered.
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Don’t give in to bidder’s excitement. Don’t make impulse buys when participating in auctions. Scammers will be counting on you to get wrapped up in the excitement and could even prod you into a fake bidding war to get more money out of you. Even when you are on a reputable auction website, set a spending limit and stick to it. If an item goes over your budget, don’t buy it.
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Understand how auction sites work. Check each auction website’s rules and policies carefully. Pay special attention to what buyer protections the auctioneer has in place. Find out what policies apply if an item is not delivered or is significantly different from its description. Each site may have different rules and procedures. If a website offers no buyer protection at all, that is a red flag.
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Find out how payments are made. Know how and who you will pay before you place a bid. If the seller insists on using a payment method you are unfamiliar with, do some research. If the payment service doesn’t have a customer service line you can contact to find out details about how the service works, don’t use it to make a payment.
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Check the seller’s contact information. The same goes for the seller or auctioneer. Check out their website and look for valid contact information. If you can’t reach anyone, or if you do speak with someone who is uncomfortable answering your questions, don’t participate in their auctions.
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Be careful with your personal information. Be sure you trust a website, company, or auctioneer before you divulge your personal information. Once your information is in the hands of a scammer, you won’t be able to get it back.