Avoiding Online Scams: How to protect yourself when buying and selling online!

NH Personal Finance Articles: Avoiding Online Scams


Avoiding Online Scams
How to buy or sell stuff safely online!

by George C. Jobel
Updated 7-03-15
Trying to buy or sell something on Craiglist, Ebay or other online platforms? We're not suggesting you avoid those platforms, but we do suggest you pay attention. There are MANY ways you can be scammed, but knowledge is power!

Almost all scams online involve some variation(s) of 4 principals:
1)  The payment recipient is fraudulent. He isn't the person (s)he said he was (not the landlord, not the car owner, etc.)

2)  The merchandise is fraudulent. It isn't an authentic gemstone, not the precious metal, not the 'labeled' product, not legitimately owned-and-therefore-available-for-sale, etc.

3)  The payment method is fraudulent. The check is bad, the cash is counterfeit, the escrow company is fake, etc.

4)  The offer is fraudulent: it's merely a scam to steal your personal identity, credit card information, etc.
Scams typically also involve a 'rush' circumstance or someone professing to be an 'agent', or 'middleman' (think brother, broker, neighbor, friend, cousin, etc.)

Two Common Ways People Are Defrauded

Vanishing Merchandise: Let's say you are selling a ring. It's worth $2,000 and you are selling it for $1,500. You get a call from Texas, and they immediately pay with PayPal. You're happy and you mail the ring to the buyer. A week later, the buyer asserts that the ring wasn't as advertised, PayPal reimburses them (from your Paypal account, usually after a nominal 'investigation') and you haven't got the ring or the payment. If they do return (a) ring, it's a cheap substitute, and you can't prove that it wasn't what they received.

Careless Overpayment: You get a call or email from a busy executive. He asks you a few questions and agrees to buy your item indicating his staff will cut a check right away to purchase the item. You get an email (occasionally a call) in a couple of days saying the staff mistakenly way overpaid you, requesting that when the check arrives, can you simply take the intended amount plus a generous amount for your trouble out of their remittance and wire the balance back. You deposit the check, wire the overpayment amount and ship the item. In about 2-3 weeks you'll discover the check is bogus (probably a real bank but a non existing account), and you are out the merchandise AND the money you sent by wire.

What you can do to protect yourself:

Check User Ratings - If you are buying or selling on EBay, or another platform that allows user 'ratings', only buy from, or sell to, established users, say people who have 200 or more transactions.

Check IDs - Before you buy from or sell anything to anyone ask for his/her name, address and phone number. Look up their name on Switchboard.com or similar service. Once the person's listing is located, you can pay 95 cents and get a full name, address, age & DOB, and address history. Does the information provided seem to match the ID or individual? If there is no matching record, walk away from the deal. If they claim to have just moved, ask for the prior address and check it all out. Dial the 'former' phone number and see what happens.

Take Pictures - If you are meeting in person, tell them in advance that you are worried about scams and ask if you can take his/her picture and/or their car, particularly their plates. Any hesitation to get their picture taken, or provide contact information, should prompt you to walk. Chances are, if you ask in advance, that won't be an issue: they won't show up!

Be Wary of a Stack of 'New' Bills - If the $20 bill you present to the cashier is counterfeit, and you walk away with the merchandise, who are they coming after for the payment or goods? The printer? Nope - You! When you hand cash or a check across the counter, YOU are making the purchase. YOU got the goods, therefore YOU are responsible.

Accept only US Postal Service Money Orders for Payment - They are hard to counterfeit, available anywhere, and the Post Office will cash them. Don't want to wait for the mail? Western Union doesn't require any of your banking information and never bounces. Don't want to use Western Union? Walmart now has a money sending service too. Click for details.

Save Someone A Headache - It might not help anyone, but if you feel the need to walk away from a transaction, call the police. Your call to them just might save huge headaches for someone else.

For more information, try reading Suzanne Kearnes' article on MoneyCrashers.com or visit OnGuardOnline.Gov and/or here, which has an extensive group of articles dealing with Common Online Scams.

To view an actual scam attempt click here.

About the Author

George C. Jobel does web development and SEO consulting and has been helping clients develop successful online & multimedia marketing since 1995. The author of numerous articles, George has taught numerous web development, marketing and Internet classes since 2000. You can reach him at his web site, or 603.491.4340.


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