Here's the latest version of this, with lots new stuff. Additions, corrections welcomed... How to Avoid Getting Cheated on eBay Online auctions can be a great way to buy coins. You can shop from the convenience of your home or office any time day or night. There's a huge selection, and though the selection is skewed toward the bargain priced and aimed at bargain hunters, many big-ticket coins are auctioned as well. The big three online auction houses are eBay at http://www.ebay.com, Yahoo Auctions at http://auctions.yahoo.com, and Amazon.com Auctions at http://auctions.amazon.com, with eBay being far larger than Yahoo Auctions and Amazon.com Auctions combined. Unlike most in-person auctions, online auctions typically stretch out over days and end at a specific time. The highest bidder when the clock strikes, wins. There are tricks to placing winning bids, and other tricks in maximizing the bids placed on items you're selling. The strategizing, ticking clock, and winning and losing impart a game quality to online auctions. Online auctions, in short, are fun. Online auctions can also be risky. Fraud is common. eBay contends that the rate of auction fraud on its service is very low. It says that only one "confirmed" fraud occurs per 40,000 eBay listings. That is indeed a low rate -- 0.0025 percent. The FBI, on the other hand, contends that the figure is much higher. As a part of its "Operation Cyber Loss" project, it determined that the rate of online auction fraud is about one in a hundred, or 1 percent. This is a very high rate of fraud, a whopping 400 times higher than what eBay contends. The FBI's figure is the one to believe. eBay, whose earnings continue to soar, is very reluctant to intervene in individual auctions, describing its service as merely a venue that brings buyers and sellers together. Its policy is that it won't interfere, for instance, with the auction of a blatantly counterfeit coin that's auctioned as an authentic coin unless it's contacted first by law enforcement authorities. eBay is very much skewed toward promoting the interests of sellers -- they're the ones who pay fees and earn eBay its profits. Though the vast majority of coin dealers are and have always been honest and reputable, questionable business practices and outright fraud have long been a part of numismatics, among mail-order dealers and flea-market sellers as well as dealers who sell on bourse floors, in-person auctions, and coin stores. The continued popularization of the Internet is just exposing more people to fraud. Common problems with online coin auctions include overgrading (sometimes with the help fringe grading services such as ACG), inaccurate or misleading descriptions, deceptive photography, counterfeits being sold as authentic coins (with or without the seller's knowledge), and outright nondelivery of coins purchased. All the online auction services provide buyers and sellers with some protection against fraud. eBay provides fraud insurance, but it's limited. It offers only up to $200 of insurance per item, with a $25 deductible. If you buy from a seller on eBay who is a SquareTrade participant (the SquareTrade seal appears in their auction listing), you're eligible for slightly more protection, typically $250, though this can range up to $1,000, also with a $25 deductible. Very few sellers, however, participate in eBay's SquareTrade program. One important protection against fraud is "feedback" -- a way for participants in a transaction to rate one another and for others to see those ratings. A large percentage of negative feedbacks is a clear signal to stay away from a particular seller. But feedback is far from foolproof. The ratings are always skewed positively, since leaving someone with negative feedback opens you up to receiving retaliatory negative feedback in return, and many people are reluctant to risk tarnishing their feedback record this way. One trick to avoid getting retaliatory feedback is to wait to leave feedback until the seller has done so first, after receiving your payment. Some sellers, however, don't give buyers feedback until they receive it first. These sellers should be avoided. Sellers should give feedback when buyers pay and the payment clears, since buyers by doing so are following through with their end of the deal. What's more, a high number of feedbacks (PowerSeller status, for example) in itself doesn't always indicate that the seller doesn't sometimes engage in questionable business tactics. An eBay PowerSeller can have up to 2 percent negative feedbacks, which is a high percentage of deals gone bad to such an extent that negative feedback was given. There's also plenty of anecdotal evidence that eBay is particularly lenient about responding to fraud perpetuated by PowerSellers, who through their heavy selling pay more in fees to eBay than other sellers. Still, feedback can be of some help. Another good feedback technique is reading the feedback of those bidding on a coin. If they have a lot of feedbacks, and if they're for buying similar coins, this can indicated they're knowledgeable about the coin or the dealer, which is reassuring. But you need to be careful about "shill" bidders, typically friends or business partners of the seller who bid on an auction to artificially drive up its price. Shill bidders often have a low number of feedbacks and a high percentage of feedbacks for buying from one or two sellers, though this in itself is not conclusive. You should avoid buying a big-ticket item from a seller with few feedbacks. But buying a more expensive item from a seller with many feedbacks can also be risky, depending. One trick that scammers use is to sell a number of low-cost coins or other items to build up positive feedback, then auction off a big-ticket coin and skip town, virtually or otherwise, without sending it. It's always best when buying an expensive coin to make sure that the seller has sold similarly priced coins in the past. eBay saves auction pages, but for a limited time, about 90 days. You can access these auction pages through a seller's feedback. (eBay's search feature is much more limited. It only permits you to search for past auctions that ended within the previous 14 days.) One eBay scam involves a bad guy hijacking the eBay account of a seller with a good feedback record by deceitfully obtaining his password. One possible tip-off during the auction is that the seller is auctioning a pricey item or items completely unlike those he's auctioned before or is that the seller previously only bought on eBay, never sold. One possible tip-off upon completion of the auction is that you're asked to send payment to a location completely different from the location listed in the auction. If you have any questions, send a message to the seller through eBay. If his answer continues to arouse suspicion, don't send your money. eBay has recently tightened up its security features to try to prevent this type of fraud. Now, if an automated password-cracking program fails to guess a password on the twentieth try, eBay flashes a code on screen that you have to type in manually. Despite this safety feature, it's still best to use a password that's difficult to crack -- a combination of upper and lower case letters as well as numbers and one that's not the same password you use elsewhere. Sellers can still be tricked into revealing their passwords to scammers by clicking on a link in an official looking e-mail message that appears to come from eBay. They're directed to a spoof site that looks just like eBay but is solely designed to obtain people's passwords. To prevent yourself from falling victim like this and ruining your good feedback, always go to eBay and related sites such as PayPal through your own bookmark or favorite or by manually typing in the site's address. If you have any suspicions for any reason about a coin being auctioned during the course of the auction, send a message to the seller asking for clarification. If the seller doesn't respond or if you have doubts after getting a response, refuse to bid. If you've bid on an item in an on-going auction or if you've won an auction just completed, eBay lets you request the seller's phone and address. With more expensive items, it can sometimes make sense to initiate telephone contact before the auction's completion. When you request a seller's contact information, eBay informs the seller of this and automatically sends the seller your contact information. You can also ask in one of the online discussion groups if anyone has had dealings with a particular seller or sees anything suspicious about a particular auction. There are many such discussion groups on the Internet. The most popular group about coins in general is the Usenet group rec.collecting.coins. You can access it through a newsreader such as Forte Agent, e-mail program with newsreading capabilities such as Microsoft Outlook Express, or the Web through Google Groups at http://groups.google.com. The most popular online discussion group about ancient coins is the Moneta-L e-mail group, available through Yahoo Groups. You can subscribe, for free, at http://groups.yahoo.com/group/Moneta-L. New online discussion groups are popping up all the time. One interesting new one about coins is Coin Talk at http://cointalk.org. With lower-priced items, one question to ask the seller is if the coin pictured in the auction is the coin you would receive, if it's not already indicated. Some sellers put up a generic picture of the coin type, which isn't necessarily deceptive, but this should be disclosed. Some scammers deliberately send a lower-quality coin of the same type and year from the one pictured. With lower-priced items, some sellers charge artificially high shipping and handling fees. Be sure you know what the charges will be before bidding. You should save the online image of any coin you buy. Sellers frequently delete these images after the sale to free up disk space wherever they're storing these images, and there's nothing wrong with this, but having the picture later can be beneficial if there's a problem. It can also be a good idea to save the auction description as well as the auction terms, whether or not those terms are included in the auction description or provided through e-mail. Photography can be used to illustrate what a coin looks like or to deceive. Online images of coins that are too dark or too small or too fuzzy may indicate the seller lacks imaging skills or is deliberately trying to hide something. Sharp, bright photos of coins in which the fields seem overly smooth may have been manipulated in an image editing program. One way you can sometimes spot this is by saving the image to your hard disk, loading it into an image editing program, and looking at individual pixels to see if they've been blurred together. But don't confuse blurring with JPEG artifacting, which is a result of image compression. With the latter, you see squares and rectangles (artifacts) of different sizes when you zoom in. It's usually good policy to refuse to buy any higher end coins through online auctions in which the seller doesn't offer return privileges. Even if the online image of the coin hasn't been deliberately manipulated, you can see far more of any coin in person than you can from a photo. Sellers who claim they're liquidating estates and that therefore all sales are final may be hiding something unpleasant behind their no-returns policy. With ancient coins, it's best to buy from a seller who offers a lifetime guarantee of authenticity, particularly with pricier specimens. There are many fakes of ancient coins out there, and even experts occasionally get fooled. If you buy an ancient coin, and it's later condemned by an authentication service or by several dealers you show it to informally, you should be able to return it and get your money back. It's also usually good policy to refuse to participate in private auctions, where the seller keeps the bidders' eBay user ID private. Being contacted by other eBay users is one way to avoid getting cheated, even though eBay discourages this by referring to it as "auction interference" and suspending the accounts of some who do this, and Yahoo Auctions makes it impossible for people to contact bidders. Still, people do this with eBay, and it's often the only way that bidders are protected against cheats. Cheaters, knowing that some people will try to contact bidders this way, set up a private auction to prevent this. On the other hand, not all private auctions are scams. Another common tactic among cheaters is running three-day auctions, long enough to snag someone but, in the minds of sellers, not too long so as to attract undue attention. One protection with more expensive coins is to ask, before the auction closes, if the seller will agree to use an escrow service, such as Escrow.com at http://www.escrow.com. The way it works is that upon the completion of the auction, the buyer sends payment to the escrow service. When this payment clears, the escrow service notifies the seller to ship the coin. When the buyer receives the coin and notifies the escrow service that it is as it was described, the escrow service forwards the buyer's payment to the seller. Typically, the buyer pays the escrow service to use it. At Escrow.com, the amount of payment depends on the price of the item and whether a credit card or other payment method is used, with a minimum fee of $15. Very few coin auctions involve escrow, however, and because a seller doesn't agree to use it doesn't necessarily mean that the deal is a bad one. If you do use an escrow service, you need to be careful about scams involving fake escrow sites, such as Golden-Escrow.com (meant to be confused with the legitimate escrow service GoldenEscrow.com) and Escrow-is.com. These sites have been shut down, though new fake escrow sites open up. As a buyer, it's best to suggest the escrow service yourself and to make sure it's a legitimate one. Still another common tactic among scammers is selling a counterfeit, altered, or doctored coin, indicating that they inherited it from their grandfather or other relative, contending that they know nothing about coins, and saying that what you see is what you get. Sometimes, though, people not knowledgeable about coins do inherit authentic coins and try to sell them on eBay. An auction with unusually low bidding for an authentic or undamaged coin of its type, date, mint mark, and grade may indicate that bidders are staying away from it for good reason. The old saw, "If it's too good to be true, it probably is," very much applies to online auctions. Deals can be had, but you need to be careful. Finally, be careful about sending payment to sellers from abroad, particularly sellers who ask you to wire money through Western Union. One common scam, popular among scammers in Eastern Europe and Southeast Asia, is for the seller to tell a skeptical bidder to make out the funds in the name of the bidder's wife or sister, a name not known to the seller. The seller says that this way he'll know the funds were sent, so he'll ship the item, but he won't be able to collect the funds without Western Union getting an OK from the bidder. In truth, Western Union doesn't carefully verify the identities of recipients and the seller in this scenario will be able to collect the funds regardless. Another scam involving shipping is the creation of fake shipping sites, such as KLM Express and Prompt Express. Scammers have used these sites to "prove" that they sent the item and that you can send them payment for it. After they receive your payment, the sites disappear along with your money. The above are all possible warning signs. But not all low-feedback or bad-photo or no-returns or private or three-day or no-escrow or inherited-coin or low-bid or transatlantic auctions are scams. Try to keep things in perspective. Thousands of coins are bought and sold every day on eBay without a problem. Some people overreact in fear and refuse to participate at all in online auctions, depriving themselves of an enjoyable way to build their collections. Ultimately, with online auctions, knowledge is power. Arm yourself with information like this, and you'll greatly lessen your chances of getting duped. You can find more at the following Web sites: Auction Watch's Tips and Tactics http://www.auctionwatch.com/awdaily/tipsandtactics/index2.html Internet Fraud Complaint Center's Fraud Tips http://www1.ifccfbi.gov/strategy/fraudtips.asp The Federal Trade Commission's "Internet Auctions: A Guide for Buyers and Sellers." http://www.ftc.gov/bcp/menu-internet.htm
8O Anytime you spend your cash you stand a chance of being duped, cheated, etc, etc. On-line anything your odds of getting cheated is greater, not withstanding sites that gather up your personal information and sell it to anyone and everyone. Take into consideration also, Dr's do it, Credit Card Companies do it. Hey its a buck right. I dislkike the selling of any information that pertains to me, however, I know you can't stop it.
Boy don't get me started on that one - the way of the 'new world' --- it SHOULD be illegal - that is why there is so much identity theft. Didn't those laws pass the last administration? It will only get worse before it gets better - one of my pet peeves. :?
It's a shame that we can't copywrite our personal bio. I've had dreams about suing the *#&% out of the credit bureaus for collecting my 'classified and protected information' for their mis-use.
That's a good bit of info about buying on eBay. I bet I'm not the only one that is shy about buying there.
Oh yeah. I was doing a little research and found some interesting and useful posts. Hey, Cointalk is young. I started http://www.brooklynonline.com in 1997. I think Speedy was still using crayons back then. Ruben
