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Online Auctions: Going . . . Going . . . Uh-Oh!

Although there are many great auction sites, there is one that leads the market - eBay. eBay is a great service, since anyone who wants to can sell anything they have to anyone who needs it. It's like buying a table at a virtual flea market. They sell lots of collectibles, lots of new stuff, and some junk (unless it's the treasure you've always wanted). If you browse it, you'll buy something. Trust me.

Online auctions are great places to find bargains. But unless you're careful, you can get less than you bargained for. The most frequent complaints received from purchasers are that the goods were never delivered, or that the item was misrepresented, was damaged in shipping, or was defective.

Here's a checklist of things you should do if you want to buy at an auction site:

• Make sure it's a reliable auction site. Auction fraud complaints were more numerous than any other online fraud complaints received by Internet Fraud Watch, accounting for five out of every seven complaints they received in 1998. They are also at the top of our fraud complaints. Check the site out with the consumer protection information sites, and if you don't like what you learn, shop elsewhere. Also ask around at discussion boards, and do some basic research at Web sites you trust to help you find tried-and-true auction sites.
• Become familiar with the auction site-how it works and its rules, including return policies (are there restocking fees?), shipping and handling costs, insurance options, warranty (look for one year parts and labor on electronics, a defective-product replacement, and a thirty-day no-questions-asked full-refund policy), as well as customer service and complaint mechanisms. Make sure you have all contact information, including offline contact information for the auction site and the seller. (E-mail addresses can be changed very easily.)
• Avoid individual sellers and get to know the seller you're buying from. If you have to have something that this individual is selling, check him or her out carefully. Get offline contact information and an e-mail address that isn't from a free Web-based service, like Hotmail. Check to see if the online people finders link to the same information. Run their e-mail address and telephone number through the reverse searches like switchboard.com. If the site has a seller reviews or feedback page, check it out and see what other buyers have to say about this seller. But you should know that many sellers plant good reviews to mislead buyers into believing that they are reliable. And competitors often plant negative comments, too, trying to steer you away from their competitors. So take all comments in stride. eBay and others have agreed to start keeping track of the feedback and complaints received from buyers and terminate sellers who have a history of failing to deliver. But don't rely on the auction site to protect you from any unreliable sellers. You have to look out for yourself. Also, if you're a member of a certain special-interest collectors' group, you might want to ask the group if any have been burned by a particular seller, or if any members find another to be more reliable. And report what you have experienced, good and bad, so others can benefit from your experience.
• Make sure you understand the payment terms before you start bidding. If you submit a bid, you are accepting the terms as offered, whether you knew them or not. Ignorance of the terms, assuming they are posted, is no excuse.
• Don't believe everything you hear. If they promise you a collectible, get a reliable appraisal, and buy only from a trustworthy source. Many sellers try to pass off counterfeit goods as genuine goods. If the sale seems too good to be true, it's probably a scam. Don't suspend your common sense and street smarts just because you're online. If you wouldn't fall for something offline, don't fall for it online. Don't let anyone pressure you into buying "right now."
• Don't buy illegal goods online-you can be easily traced. And even if you aren't investigated by the police, do you really want these kinds of people having your home address and credit card information? People sell term papers, fake IDs, and just about everything else you could imagine online. (Recently, we even found someone selling what purported to be child pornography videos on one of the online auctions. It was removed the moment the auction learned about it from us, but it gives you an idea about some of the people out there.)
• Use a safe payment method, and try to use an escrow agent and insurance, if available. Some auctions offer a special service to their shoppers to protect them against small losses. eBay protects its shoppers from the first $200 of loss, with a $25 loss deductible. Since, according to Internet Fraud Watch, the average loss reported to them in 1998 was $211, this may have covered most of the average losses. [someone please research and update this]
• Plan ahead. Check competitive non-auction prices. Decide how much you can spend and stick to it. Many of the new auction sites allow you to preset a maximum spending limit for any particular item. This is a good idea, since many people get "auctionitis," bidding higher than they should because they get caught up in the excitement. This is especially important when our children might be using auction sites. We need to cap their spending and make sure they don't get carried away. Some online auctions have a bidding proxy program, which bids for you up to your maximum even when you can't get online and watch the bids yourself.