Auction is market mechanism by which buyers make bids and sellers place offers. It is characterized by the competitive and dynamic nature by which the final price is reached. Auctions can rapidly disposal of items that needs liquidation or a quick sale, they offer trading opportunities for both buyers and sellers that are not available in conventional channels and they ensure cautious execution of contracts. The most popular type of auctions is an electronic auction (e-auctions) which means auctions conducted online.
The largest Internet auctioneer is eBay which has introduced several measures in an effort to reduce fraud. Following are action to prevent e-auction fraud:
1. User identity verification such in IC number, driver’s license number or date of birth. For example, verified eBay user, the voluntary program, encourages users to supply eBay with information for online verification.
2. Authentication service. It is to determine whether an item is genuine and described appropriately. It difficult to perform because their training and experience, experts can detect counterfeits based on subtle detail.
3. Grading services which is a way to determine the physical condition of an item, such as ‘poor quality’ or ‘mint condition’. Different item have different grading systems. For example, trading cards are graded from A1 to F1, while coins are graded from poor to perfect uncirculated.
4. Feedback forum. It allows buyers and sellers to build up their online trading reputations. It provides user with ability to comment on their experiences with other.
5. Insurance policy. For example, eBay offers insurance underwritten, users are covered up to $200, will with a $25 deductible. The program is provided at no cost to eBay user.
6. Escrow services. Both buyers and sellers in a deal are protected with an independent third party. Buyer mails the payment to escrow services which verifies the payment and alerts the seller when everything checks out. An example of a provider of online escrow services s i-Escrow.
7. Non-payment punishment. To protect sellers, a friendly warning for first-time nonpayment. A sterner warning is for second-time offense, with a 30 day suspension for a third offense and an indefinite suspension for a fourth offense.
8. Appraisal services which use a variety of methods to appraise items. It includes expert assessment of authenticity and condition, and reviewing what comparable items have sold for in the marketplace in recent months.
9. Item verification which is a way of confirm he identity and evaluate the condition of an item. Third parties will evaluate and identify an item through a variety of means. For example, some collectors have their item “DNA tagged” for identification purpose. It provides a way of tracking an item if it charges ownership in future.
10. Physical inspection. It can eliminate many problems especially for collectors’ item.
Besides, there are some other concerns to prevent e-auction fraud,
- Be aware of phishing. Verify that you are receiving emails from the correct source and that you are logging in at the correct website.
- When making payment, prefer using your credit card over online transfer. Using a credit card give you the opportunity of a chargeback in case the transaction turns out a fraud. Use debit card, wire transfer, or money order only when you completely trust the seller.
- NEVER make a deal with a seller outside the auction. Although they sound lucrative, you are at a very high risk of being cheated.
- Become familiar with the auction website. Look into the websites protection policies. Never assume you are protected from auction fraud.
- Before placing a bid, learn as much as you can about the seller. If you can’t find anything out about the seller, than avoid doing business with them. Never fall for promises of better deals by moving away from the original auction website.
- If the seller wants you to use an escrow service you’ve never heard of, look into it.
- Never ever give out your social security number, drivers’ license number, credit card number, or bank account information until you have thoroughly checked out the seller and the escrow service.
- Always save 100% of the transaction information. You’ll be glad you did in the event your case makes it to court.
- If after the sale you feel the item/payment should have been delivered already, try to work it out with the seller/buyer.
By:
Wong Zheng Hwa 0701815
No comments:
Post a Comment