How Do eBay Scams Work?

There are many different ways scammers are using eBay and similar auction sites to profit off online consumers and bargain hunters. Many of the circumstances that can rob you of more money than you save is simply a matter of less than sincere practices by other shoppers or sellers, but there are also some outright scams that rob thousands of people of their money every year.

Bad behavior by other eBay members can rob you of much more money than you actually save by using the site. Some buyers may regret a purchase or find a lower priced item after purchasing from you. In this case, they may claim that they never received the item or that it was received in bad condition or broken. In order to save your feedback rating, you might refund their money to avoid negative remarks being left.

Most eBay sellers have dealt with these issues at least once, but there are some scams that will rob buyers as well as sellers of more substantial amounts of money. Some can even lead to criminal charges for completely innocent people.

“Triangulation” is a term used to describe one of the most devastating eBay scam strategies. Scammers will place listings on eBay for very popular items that usually sell for higher prices. This could be anything from a popular name brand of clothing to appliances and electronic items. These will always be items that are readily available from online retailers.

Once a bidder wins the auction, the scammer will simply order the product from an online retailer using a stolen credit card number. They give the store the address of the winning bidder, which keeps their own identity and address completely invisible. They keep the money that the bidder sends them through Paypal. (Please see how do paypal scams work)

eBay Scams, "eBay Shield scam"

Believe it or not there is a kind of scam called the "eBay shield scam." This is a scam where a con-artist will have two fake accounts, and they will simply prey on victims selling high dollar items with no reserve. Here is a hypothetical situation. Let's say you are selling some expensive wheels on eBay for 2,000 dollars. Well, a scammer will bid on your item for $25 and then immediately prior to that bid they will bid from a separate account for 4,000 dollars. At the last second the big bid, the 4,000 dollar one will be retracted by the buyer and thus the winning bid is $25. Since you had no reserve you are liable to sell your expensive rims for a low price.

They simply use two different accounts and scare others away with there second bid. People are looking for a deal and will immediately look the other way if something is way to high. Anyone caught trying to get do this will more than likely have their accounts suspended and banned from eBay forever.

Diving Deeper Into eBay Scams

What happens next? The online retailer ships the item directly to the winning eBay bidder and later on when the owner of the stolen credit card realizes the card was used illegally it is all traced back to the eBay winner, not the real criminal.

This is an elaborate scam that requires access to someone else’s credit card, but there are more common scams that require nothing but a little creativity. For example, some scammers are making money simply by listing beautiful pictures of popular products along with detailed specs of the product. Bidders who don’t pay close enough attention fail to notice the very small words that inform them they are only bidding on the picture, not the actual item.

Similarly, some people have unknowingly purchased a list of wholesalers who sell a particular item. Some people may know they are bidding on a simply list but not realize that you have to be a registered business to purchase from a wholesaler, which makes that list useless to them. Others just think they are bidding on the actual item, not a piece of paper.

Of course, there are the typical scams that ask for payment through Western Union (Please see why scammers use Western Union) instead of the usual Paypal transactions most people use today. Most of the products paid for through Western Union will never actually arrive on your doorstep.

If you use common sense and carefully read every single word on ever listing you bid on, you can avoid many of the eBay scams operating today. Also, be careful when using an escrow service for payment. Some scammers are setting up their own escrow accounts which are nothing but a way of taking your money for products that never arrive or aren’t the real deal.