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Watch out for these eBay scams!

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Whatever you do, don't fall for these tricks.

Whilst most of us are familiar with the term caveat emptor (“buyer beware”) the term caveat venditor (“seller beware”) is not so well known.

Unfortunately, it is a term that will forever be branded on the wallet of one lovemoney.com reader, who contacted us after selling her iPhone on eBay for £500.

She received the money from the buyer into her Paypal account and posted the item to the buyer’s address. Suspiciously, a week later, she received - by recorded delivery – a box containing pieces of wood from the buyer.

After she’d signed for the box, the buyer contacted Paypal and asked for their money back and, without questioning the matter with the seller, Paypal agreed to refund it in full. On discovering this, our reader contacted Paypal to explain what had happened, but the site did not respond.

A few months later, Paypal started threatening her with debt collection court proceedings (as she had already withdrawn the £500 she’d received from her Paypal account).

On hearing this sad tale, we decided to investigate. Is it right that this can happen to honest sellers? What other scams are out there? And what can you do protect yourself?

Other eBay scams

You've sold an item, and an email from Paypal drops into your email inbox. Everything looks fine  but make sure you check your Paypal account before you head to the Post Office to ship the item.

Online security website WeLiveSecurity says that some buyers may send you a hoax Paypal email that looks legitimate, to get you to send the item. But you'll never get your money.

Be aware that some dishonest buyers may complain that you've sent them a broken item, and submit a complaint to eBay in an attempt to force you to give them a refund. 

The solution? Always ship expensive items with insurance. Get the buyer to cover the cost in their postal fees. This also has the benefit of protecting you if there is a genuine breakage that occurs during the delivery. 

The majority of sellers on eBay are people who just want to clear out some space and make an honest buck out of it. And then there are the scammers.

If you're buying an item, make sure that you are 100% sure of what it is that's actually on sale. There are those who will advertise an expensive phone (or similar item) box, or even a picture of a phone on eBay. They'll be sure to include a brief mention of what you're really buying (worthless paper/cardboard) in amongst the very long list of other details.

While this is expressly forbidden by eBay's rules, scammers still try to pull the wool over buyer's eyes, so be vigilant. If you spot a deal that seems too good to be true, it probably is. Be absolutely sure you're not getting ripped off before making a bid, and ask the seller for extra pictures of the phone if in doubt.

Be sure to check the postage costs of an item too. These may be legitimately high if you're buying a large or heavy item, but some unscrupulous sellers (even those who have a real item to sell) will try and scrape extra cash from you by inflating the postal charges for their sales.

Some sellers flog fakes on eBay too, and it's particularly hard to spot if something is fake from just a few photos on an eBay sale. Avoid people who only use stock photography, and check their sales history and feedback carefully.

If they've sold 30 Calvin Klein belts in the last week, it's a fair bet that they're dealing in dodgy goods (unless, perhaps, it's a large shop operating through eBay).

This list of scams is sadly far from exhaustive. If you know of others, warn your fellow loveMONEY readers using the Comments at the bottom of the page.

Safety on eBay

In the eBay marketplace there is much emphasis on the safety of the buyer and the site is full of useful safety tips. But when problems arise, are sellers equally protected? After all, buyers are not the only ones who can become victims of a scam: sellers need to be just as wary of fraudulent or dishonest transactions.

Here’s how to ensure you don’t fall victim to trap.

Seller protections

There are measures in place to protect sellers, but it is largely a case of taking responsibility for your own safety and making sure you follow the seller safety guidelines to the letter. You are also strongly advised to pay for extra protections, such as using Recorded Delivery or buying insurance for your package contents. For large sellers and traders these extra costs are worth it to protect yourself. But if you are a small time private seller, selling low value items, these added costs (along with the fees payable to both eBay and Paypal), can make any profits disappear very rapidly!

eBay and Paypal both have comprehensive details on their websites addressing seller safety. The eBay Safety Centre gives tips such as safe ways to accept payment, recognising suspicious bids, checking the identity of your buyer, examining feedback and taking steps to ensure safe delivery.

Paypal also have a page dedicated to seller Protection on eBay, with step-by-step instructions including details on which items are eligible for seller Protection, retaining online trackable proof of delivery and obtaining Proof of Signature for items worth £150 or more.

eBay and Paypal

Some found the previous relationship between eBay and Paypal a little too close for comfort. On 3rd October 2002 eBay acquired PayPal, and any user of eBay will be aware that you are politely and firmly encouraged to use the money transfer company.

Now, however, the two have split and become separate companies, and are no longer within the same group of companies either. Not much has changed, in a practical sense, and eBay and Paypal say that they still share some customer information to protect against fraud.

While paying 'two' fees as a seller, to both eBay and Paypal can cause resentment among some users. But the bottom line is that it is by far the most secure and safe method of transferring cash, especially when compared to a payment by cheque or via a money transfer agent like Western Union.

Customers are particularly advised against using these payment methods, which are considerably less secure when taking or making payments to a stranger.

Scam awareness

A basic scam involves a buyer simply claiming their item never appeared and asking Paypal to refund their money, which Paypal can deduct from the seller’s account in some instances.

However, if the seller has followed guidelines and procedures, particularly in regard to using a trackable postal service and obtaining proof of delivery, then they should have enough evidence to show that they sent the item and that it was accepted at the point of delivery. 

It is also a good idea not to retain any emails relating to a transaction as claims can be made weeks or even months after an item has been sold.

Be aware that fraud is much more likely to occur when selling high value, popular items, such as iPods or iPhones. In the scam detailed above, the fraudulent buyer sent back a box full of wooden blocks.

Why? Because the blocks make the package feel like it is the correct weight, so the seller is more likely sign for it - then get an unpleasant surprise.

Unfortunately, if you sign for the returned package, the buyer can then make a claim to Paypal for a refund, which Paypal can then take directly from the seller’s account.

What’s the answer? If you’ve recently sold a high value item on eBay, and the buyer hasn’t contacted you to say there is a problem, refuse to sign for a parcel from your buyer – or at least, open it before you sign.

If you receive a suspicious package after selling such an item online, it might also be wise to record yourself opening the box.

Take care to show that the box is sealed prior to doing so, indicating that you have not tampered with it.

What to do if you are a victim

A case of fraud like this can be very frustrating for a seller. Chris Dawson, co-owner of Tamebay (a useful independent website providing news and information about the inner workings of the eBay marketplace) advises sellers that although most disputes can be resolved through the eBay resolution centre, there are exceptions.

If you believe your item has been stolen you should report the matter to the police. You will then be issued with a Crime Reference Number and if police decide to take the matter further an investigating officer will contact eBay who will assist fully with the investigation.

eBay takes criminal activity on its site seriously and has a dedicated team working with law enforcement agencies such as the police and Trading Standards, as well as specific contact page for law enforcement agencies to use.

What are the alternatives?

If you have been the victim of a scam, or are just becoming disillusioned with eBay, simply jumping ship is not always an option for a seller.

The problem is that there are not many realistic alternatives to the online giant. They are still by far the largest online market place and give sellers unparalleled access to a vast number of potential buyers which just can’t be equalled elsewhere.

If you do choose to go with one of the alternatives you may end up paying less in the way of fees - but you will be reaching such a vastly diminished marketplace that you may risk not selling the item at all.

One site that might interest you as an alternative to eBay is Shpock, which has now welcomed four million users in Europe so far. It's still dwarfed by eBay but Shpock does not charge sellers for listing an item.

Have you been an eBay victim?

Let us know your experiences of using eBay – use the comments box below!

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