March 10, 2006
Risks of Online Auction
I heard some discussions around what the price of the most expensive item sold on eBay. I have some sources telling me that it was to the tune of $4.9 million (apparently a gulfstream II jet was sold online). eBay generated $8 Billion dollars in value of transactions with about 104 million registered users and 45.1 million active users. With such a high volume of users, trades, auctions and cash transactions, some questions that arise are
How safe are these transactions?How is identity theft prevented in online auctions?What resources are available to average buyers and sellers to guarantee a fair trade?Whose responsibility is it to ensure that fair trade happens and fraud is prevented?The last I know on this topic (something I heard from a leading online auction company employee) is that the onus of detecting fraud still lies in the hands of the user. As a buyer, I am expected to determine if a seller fraudently raised the prices (using a duplicate id or other means). I was told that users are quite smart these days and they figure out detailed information about frauds including originating IP address. I consider myself pretty computer savvy but I would still not be able to determine with any level of certainty whether I was (or was not) cheated on eBay, let alone tracing who was involved in the fraud.
So the only advice for online auction users (especially if you are going to buy your next gulfstream jet or your next home) is to find ways to verify that you are getting a fair trade in the transaction. Attached below are some resources including articles on online auction frauds and the FTC advisory!
Posted by vdakshin at March 10, 2006 06:42 PM