How a cyberposse is protecting you from auction fraud

AnchorDesk

How a cyberposse is protecting you from auction fraud

David Coursey
Executive Editor, AnchorDesk
Tuesday, March 12, 2002

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Chances are, you've never heard of him. But if you frequent online auctions, especially on Yahoo, Greg Harrington is one of your best friends. After getting ripped off, Greg has become what no less a source than the New York Times calls an Internet "auction-fraud vigilante."

Forget for a moment the nasty vision that vigilantism conjures up and focus instead on this: Internet auction fraud is a crime nobody cares much about. Because it can be international in scope, yet small in dollar value, it often doesn't seem worth investigating. But these small transactions add up, and a crook can, through careful planning, make thousands of dollars very quickly, with hardly any chance of going to jail.

HARRINGTON, a security-equipment consultant in Houston, got taken last June when he wired $500 to Romania for camera equipment he never received. Now he's part of a small group of auction-fraud victims who've teamed up to catch the bad guys in the act--and warn their potential victims.

Nobody knows how widespread auction fraud has become, although the Federal Trade Commission says it's become the No. 1 source of consumer complaints about the Internet, placing it at the top of the FTC's "dot con" list.

It is generally believed, however, that most fraud victims suffer silently and receive no assistance from law enforcement, the auction sites, or the payment services that sometimes transfer money from buyer to seller.

YOU CAN MEET GREG and learn about Internet auction fraud on my radio program, which airs at noon PT today, March 12. (It can also be heard live on 910AM in the San Francisco Bay Area, 890AM in Boston, and Channel 130 on XM Satellite Radio, as well as live or on demand at www.cnetradio.com.)

Members of Harrington's group warn bidders via e-mail and notify auction site administrators when they spot an offering that looks fraudulent. Sometimes they purposely bid up the auction so they can win--with no intention of paying--to prevent others from being swindled.

Harrington says that on any given night, he can find fraudulent auctions in numbers upwards of two dozen. How does he spot them? He won't give away all his secrets--why warn the crooks--but says high-ticket items, such as computers, electronics, camera equipment, and jewelry, are where he looks first.

Out of the hundreds of cases he's pursued, Harrington says he's been wrong only five times, in which cases he sent apologetic notes to the sellers.

Other telltale signs of auction fraud: High-priced items with no minimum reserve price set, sellers offering large volumes of high-dollar items at once, sellers who offer to pay shipping, and auctions that end quickly, like after only three or four days.

TYPICAL CREDIBILITY CHECKS, such as the seller's online reputation, can't be trusted either. They are too easy to create. Further, sophisticated criminals are using identity theft to hijack the reputations and auction accounts of legitimate sellers and then rip off customers.

Nor does a professional-looking Web site mean a seller will really deliver the goods as promised. Harrington believes he was the victim of a well-organized Romanian crime syndicate that has created sophisticated sites to give its operation the appearance of legitimacy. Since he's focused efforts on stopping them, Harrington says, he has become the subject of threatening e-mail.

Harrington is especially critical of Yahoo Auctions, where most of his efforts are focused. Reason: He does not believe Yahoo is doing enough to stop the fraud, even when the company is notified of possible suspects. He says the company's protection policy doesn't do much to actually help victimized customers.

Along with tuning into the radio show featuring Harrington, you can learn more about auction fraud from the FTC, which has prepared a booklet that describes how consumers can protect themselves, as well as federal law as it applies to online transactions. It's available both in PDF form and on the agency's Web site.

THERE WAS A TIME--and I remember it--when Internet users didn't have to worry about becoming the victims of crime. There was also a time--and I don't remember this--when everyone in my old neighborhood left their keys in their cars. One of the downsides of progress, I suppose, is that bad people benefit at least as much as good people do.

But there's something about the Internet that hasn't changed, and that's the spirit of people helping one another. For that reason, Greg Harrington and his band of volunteer investigators are among the heroes of cyberspace.

Have you been a victim of auction fraud? What happened? Did any justice come of your misfortune? What should be done about this kind of crime? TalkBack to me, and take my QuickPoll below!

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