The Warning signs of Online Fraud and How to avoid it

by E-NewsCast Team
March 28th, 2010

The number may seem grim for Web-based commerce. In 2004 in theUnites States alone, computer users logged in more than 207,000Internet fraud reports to the U.S. Internet Crime ComplaintCenter. If you look hard at this number, you may be astounded,and a good bit frightened, by the implication. You may ask, “Isit really safe to buy and sell at an online site?” Put simply, the answer is: yes. The Internet is an incrediblypowerful tool for business, so you can’t pass it over justbecause of a few crooks and conmen—even if they do seem likethey’re behind every pop-up window and banner ad. The truth isthat you can create opportunity and make more money online thanyou could lose in fraud. Better yet, you could lose absolutely nothing if you know thewarning signs of fraud and the tricks to avoid danger duringyour Web-based business dealings.Whether you’re looking to buy or sell goods online, thefirst—and the best—way to fight fraud is prevention. There arecertain warning signs to watch for, which should set off achorus of alarms and flashing red lights in your head. Don’t dobusiness with this person! For buyers, these potential warningsigns can be when a seller:•asks you to pay through non-traceable avenues, such as WesternUnion or MoneyGram, or a third party, or via an overseasaddress. You should ask yourself—and the seller—why he or shewon’t accept payment options that are traceable and convenientfor you.•posts an image on his auction or classified ad that’s obviouslyfrom an outside source. Sometimes these images may not evenmatch the type of item, let alone the brand, that the adfeatures.•sells a typically expensive item at cut-rate prices, which is agood indicator that it could be counterfeit.•refuses to provide tracking numbers when you purchase an item.Tracking numbers are another way to trace a valid transaction.•offers only excuses, instead of help, when your purchased itemdoesn’t arrive at your doorstep.If you’re a seller, you ought to be wary of signs of asuspicious buyer, such as when a buyer:•asks to pay only some of the fee, offering to the pay the restsometime in the future. This is the old excuse from Popeye’sfriend Wimpy, who always could be heard saying, “I’ll gladly payyou Tuesday for a hamburger today.” Wimpy never paid Tuesday.•sends you a cashier’s check for more money than the agreedprice “by mistake.” In this scam, the buyer then asks you torepay him the difference by personal check, wire transfer, ormoney order—before you find out that the cashier’s check didn’tclear. Believe it or not, this scheme works because cashier’schecks can be cashed before they bounce.•sends you a cashier’s check for the correct amount of money butthen demands a refund, requesting that you repay with your ownmoney. See the scheme above for how this trick works.These warning signs, of course, are only for a handful of thefrauds and scams out there. Conmen are good at what they do,trying to separate you from your money. That’s why it’s best toalways follow these golden rules of online commerce wheneverbuying or selling on an Internet auction or classified site.Keep your common sense. No matter how good a deal seems, or howmuch clients say they want to pay, always remember the oldadage: “If it sounds too good to be true….”Do your business locally. Try to buy and sell from yourneighbors as much as possible. It’s safer, more convenient, andbetter for your local economy. What’s more, it saves you thetrouble of dealing with foreign vendors and buyers. Though theymay be legit, dealing with them can be complicated because ofdifferent legal systems and customs, which can make any conflictdifficult.Seal the deal with plastic. Paying for items with credit cards,and allowing your customers to charge for purchases, is a greatall-around business decision. Under U.S. law, all plasticpurchases are protected from fraud and allowed to be disputed incase of problems.Meet at the middle man. Intermediary services are virtual middlemen that protect both buyers and sellers from cyber shysters.Services like Escrow act as a holding pen for both payment andsale items until both the buyer and seller are content. Onlythen will Escrow finish a transaction.Purchase with PayPal. As Escrow and credit cards do, PayPalguards against fraud for both buyers and sellers. It’s a secureand reliable way to transfer money over the Internet. No wonderPayPal is the most popular online money transfer service.As you can see, the odds are actually in your favor when itcomes to doing business on online classified or auction sites.The resource of the internet is far too valuable than to betaken away by a few crooks and conmen. It simply comes down tobeing smart, sensible, and observant whenever buying or sellingon the Web. Then again, that’s what all good business is about,whether you’re doing it in a mall or on the informationsuperhighway.

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