Avoiding Plasma TV Auction Scams
By Paul Doran
Copyright © 2007 PlasmaTVBuyingGuide.com
All Rights Reserved.
We have received several reports from people who have been looking at purchasing plasma screens from online auctions including Ebay, Ubid and Yahoo auctions.
Please select from the following resources which will hopefully prevent you from becoming a victim of online auction fraud.
- Introduction to auction fraud
- Typical correspondance sent from fraudsters
- The fraudulent escrow service scam
- How you might be able to get your stolen money back
- How to report fake online auctions
- How and where to buy your plasma TV
- Further auction & escrow fraud resources
Introduction to auction fraud
Lets first consider how some online auction houses work. Like a traditional "live" auction, the highest bidder wins. That's where the similarity ends. Because an online auction house doesn't have the merchandise, the highest bidder deals directly with the seller to complete the sale. If you're the highest bidder, the seller typically will contact you by e-mail to arrange for payment and delivery. Most sellers accept credit cards or use a third-party escrow agent to handle the entire process. This would be fine because there is at least some recourse if the seller does not deliver the goods.
The con artists typically list 50" screens for around $1500 and a 60" screens starting at $1800 going up to $3000. Now why would somebody be willing to sell a 60" screen which costs over $14,000 from reputable online stores for $1800? Click here to check the latest prices on NEC Plasma Displays for several online stores.
After further investigation we made a number of online bids and successfully won a bid on an NEC 61MP1 plasma display for $2100. This plasma display currently lists for around $14,000 at most online stores. We quickly received an e-mail from the seller who was using a fake Yahoo e-mail address asking us to wire the money. Please read the following which is a copy of the e-mail we received.
Typical correspondance sent from fraudsters
As you can see the seller is asking us to wire the money to Romania, Do you think we would ever see our NEC 61" if we wired they money? How would they service the product from Romania? What would happen if they did ship the product and it was an empty box? If you wire the money to a non reputable company there is no recourse you can take.
The Fraudulent Escrow Service Scam
Legitimate escrow companies, commonly used when buying a house, are trusted third parties who hold the money until the goods are received by you the buyer. The escrow tracks the product when it ships and verifies delivery to you the buyer. Once you accept delivery and your inspection period ends, the escrow pays the seller. eBay recommends purchases over $500 use an escrow. eBay uses an exclusive escrow service through Escrow.com, a licensed, audited escrow company incorporated in California. Slick fraudulent escrow sites appear legit and are run by fake "sellers". You never get your product.
How Fake Escrow Scams Operate:
The scheming "sellers" have ads on eBay Auctions, Amazon Z-Shops, etc. This Internet fraud has become an epidemic, but you need not be paranoid.
You are buying hot electronic item on eBay, Yahoo Classifieds, etc., and you see a hot Panasonic plasma TV whose selling price is much lower than other listings for the same item. So you ask the seller a question. The seller replies with a "Dear Sir" form letter, rarely do they mention your name, it's all scripted. He wants you to use a particular escrow site, "he's used them many times already." You'll discover later via a WHOIS search that the site was only created the week before, and the liar could not have used them several times. Like a fool, you register a new escrow account at the online escrow site that the seller recommended, usually a polished looking site. The escrow sites list "license numbers" with the state. Some generously sprinkle official looking logos from the BBB, Verisign Secure, TRUSTe, and Internet Fraud Complaint Center! Some fake escrows are brazen and warn you about internet fraud! Most fake escrows falsely claim Copyright 1999 or 2000 to appear they have been around a while. Feeling secure, you send your $5000 to the escrow company and lose it forever. You never hear from the "seller" again. He ignores your emails, does not answer the throw away cell phone he bought to act as his phone number to scam you.
Fake escrows herd you into 3 payment methods:
- Payment Type 1: Makes you pay via Western Union cash transfer usually to Spain or Italy (real bad move, never pay for auctions with WU!)
- Payment Type 2: Makes you unknowingly send payment into the E-Gold, or E-Bullion networks, EvoCash or E-Dinar type currency transfers.
- Payment Type 3: Makes you wire payment directly from your checking account to what you think is the "escrow company's" bank account.
Further escrow fraud information:
- Know the difference between escrow services and other online payment services. With an escrow service, the seller doesn’t get paid until you’re satisfied. This is very important in online auction purchases, where there is no way of knowing in advance whether the goods really exist or they were described truthfully. Other types of online payment services may cost less, but since they transmit your payment to the seller immediately, you may have no protection if the goods are never delivered or were misrepresented.
- Determine how much you can afford to lose. If the item is relatively inexpensive, it may not be important to use an escrow service. Or you may be covered by insurance offered by the online auction site, the payment service you use, or both; check the limits and terms of insurance carefully. If you can’t afford to lose the amount of your purchase and there isn’t insurance to cover it, use an escrow service.
- Make sure your money is secure. Because you’re giving money to the escrow service to hold in trust, you want to make sure it’s safe. Look for information about whether the service is licensed and bonded and find out how you can confirm that with the appropriate agency. An escrow service is usually licensed in the state in which it is physically located. Generally, licensing requires employee background checks, training, supervision, and bonding to ensure that consumers won’t lose their money.
- Beware of bogus online escrow services. Fake escrow services simply pocket your money and disappear. Sometimes they operate in connection with fraudulent sellers; in other cases both buyers and sellers may be victimized by bogus escrow services.
- Don’t always believe what you see. One common practice of fraudulent escrow services is to copy information from legitimate Web sites onto theirs. If the wording is identical to that of another escrow service, it’s a danger sign of fraud. Another danger sign is using the name of a well-known auction site as part of the escrow service’s name. Bogus escrow services may also forge graphics from trustmark programs such as “VeriSign” and “Trust-e” to make their sites seem safe. Click on these symbols to see whether they link to a fully operational site of the trustmark organization and check to confirm that the escrow service is listed as a member of that program.
- Be suspicious of references to U.S. codes. Though escrow services are not regulated by federal law, some claim to comply with the “U.S. Financial and Business Code” in order to appear legitimate. There is no such code.
- Unprofessional looking Web sites can be a tip-off. Spelling and grammatical errors are commonly found on fraudulent sites.
- Get the business’ physical address. Be wary of escrow service sites that only provide an email address and offer no phone number and address. Without the address, you have no way of checking with state authorities to determine if the service is licensed.
- Get references for which escrow services to use. Some online auction sites have links to escrow services that they recommend. There are also private anti-fraud Web sites that list what they believe to be legitimate and fraudulent sites. Simply type the phrase “list of fraudulent escrow sites” into any popular search engine to find these references.
- Be wary of escrow recommendations from sellers. They may have ulterior motives for steering you to certain fraudulent sites. Always check the escrow service out yourself.
Recover your money or merchandise
This section contains important information for anyone who was defrauded by a trading partner on the internet regardless of whether a fraudulent escrow site was involved or not. It concentrates on two activities that victims must undertake, gathering information and reporting that information to law enforcement. The process of gathering information concerning your trading partner should begin before you bid on an item; it is far easier to discard information you don’t need than it is to gather that information once it has been deleted from the web.
The key to success in this area is gathering and keeping good records. Print out a copy of the auction page. You should do this for all of your auctions at the time you place your bid. Pictures on auction listings may disappear shortly after the auction is over. Details of the listing may be modified after you’ve placed your bid. If the modifications are unacceptable to you, you should ask the seller to cancel your bid or you should retract that bid. In any case, the auction listing forms the basis of your sales agreement with the seller. Should something go wrong with the sale, you need evidence as to what was being purchased and under what terms.
Get your trading partners contact information. On eBay, you may access this information by using the contact info button on this link.
Since contact information is available only while your trading partner is a member in good standing, it is important to request this information as soon as you are notified of your win – especially if the amount of money involved is high. You can access contact information only if you are currently engaged in an eBay transaction with that trading partner. This is one of the reasons you should not engage in off eBay transactions.
Retain all email between you, your trading partner, and the escrow site. Print at least one email from each source with the internet headers visible. Keep copies of all receipts or other paperwork involved in the transaction. If the escrow site contains an address and/or telephone number, print out a copy of the page displaying that information. When you file a police report on the matter, keep a copy of that report together with the other paperwork concerning what happened.
Put all of this information in a folder that you store in a safe place. Should the con artist ever be caught, you may well be asked to furnish evidence of your transaction with that person. If you can prove that such a transaction existed, you may well be able to recover some of your money as a result of a judgment that requires restitution.
Where Did the Money Go?
Before you can take effective action, you need to determine where your money went. If you mailed a check or money order or shipped a package, this is easy; it went to the specified address. However, for many situations, especially those involving con artists, the answer isn’t quite so simple.
Wire Transfer / Money Gram
The con artist may have received your money anywhere in the world. The address you sent it to is not an issue. All your trading partner needs to claim the money is the transfer number you sent him. If your money was sent through a transfer service, you need to go to the wire/bank transfer service provider you used to send the money and ask them the location where the money was received. When you’ve determined this information, you need to add it to your folder of information on the fraudulent transaction.
Because of the difficulty in tracing money when you use wire transfer services such as Money Gram or Western Union, you should not agree to use these forms of payment when sending money to someone or some company with which you are not very familiar. Wire transfers may work well when sending money to a family member, but they shouldn’t be used to send money to a stranger or to an unfamiliar company.
If the bank transfer instructions didn’t include the name of the city in which the beneficiary bank was located, or perhaps, even if it did, you should ask your banker to interpret the transfer codes. Part of the bank identification in those codes is the country in which that bank operates. Your banker should have a database of all of the bank codes so he can give you full information on the beneficiary bank. Once you’ve confirmed what bank was the beneficiary and where that bank is located, you need to add that information to your folder of information on this transaction.
ECurrency Including E-Gold and E-Bullion
If you used any of these so called electronic substitutes for money, you have no way of telling where your money went. A court order requiring that these outfits give you the identity of the fraudulent account holder is not likely to provide accurate or useful information. These currencies can be circulated among many accounts to such an extent that tracing your contribution to the flow would be impossible. Your only hope would be that the person who held the account your money was deposited in withdrew that money as cash. Even in such an unlikely event, you’d most likely find that the information E-Gold or other similar site had on the account holder was bogus.
In short, if you used this form of payment, there is virtually no possibility that you’d ever be able to identify the con artist or even his approximate location. Since these forms of payment do offer a high degree of privacy to con artists, many, if not most, of the fraudulent escrow sites require payment by these methods. The reasons that these payment methods are preferred by con artists are the very reasons that you should never use these forms of payments except when sending money to people or companies with which you are very familiar.
PayPal, C2It, Etc.
Getting any information on the person who received the money when these forms of payment are used requires a court order. As with electronic currencies, if a con artist is smart, the court order would probably gain you nothing. Normally, the credit card used to register the PayPal or C2It account was either stolen or generated. As long as the con artist doesn’t hook a bank account to his account, you are unlikely to gain any useful information. If you were able to track the money, you’d most likely see that money disappear into an eCurrency account of some sort. Again, in these situations it will be virtually impossible to even guess where the con artist is located.
Remember that if you used a VISA or MasterCard credit card through PayPal, you may be able to recover your funds by first filing a complaint with PayPal and then by disputing the charge with your credit card company. There have been some reports that certain credit card companies including Discover and American Express, will refuse any charge back against companies like PayPal. If your credit card company attempts this, you may need to seek legal advice. The Truth In Lending Act (TILA) says that credit card companies must accept and investigate disputes over charges for merchandise. Since PayPal always enters charges as merchandise, your credit card company is obligated to accept and investigate complaints. Of course, they have no obligation to rule in your favor.
Since BidPay sends a money order to the seller, you have the sellers mailing address. This address is your best information concerning the sellers location. Even though you may have purchased your money order using a credit card, you don’t have the same kinds of consumer protection with BidPay as you do with PayPal. While BidPay charges the money order as merchandise, that money order IS the merchandise you were purchasing from BidPay. As long as that money order gets to the seller, you have no grounds for disputing the charge from BidPay.
C2It enters charges for non CitiCorp credit cards as cash advances. Since cash advances can’t be disputed, you don’t have the same kind of protection with C2It as you do with PayPal. However, if you did use a CitiCorp credit card, you may well be able to dispute the charge with CitiCorp.
Even though it is a tedious, time consuming and discouraging process, reports of the fraud need to be filed in many places. Some of those places may be impossible to determine, but you still need to file reports with the appropriate agencies you can identify. You should be prepared to furnish all of the evidence you’ve gathered to each agency with which you file a report.
Local Law Enforcement
While filing a report with your local law enforcement may seem like a waste of time, there are two good reasons for filing a report with them. First, your local law enforcement agency may serve as your interface with other law enforcement agencies that get involved in the case. Second, you need to have filed an official police report before claiming the loss as a deduction on your income tax. Your tax booklet or tax preparation software/consultant should be able to provide the guidelines for such deductions.
Your police report should provide as much information as you can supply regarding the location of both your trading partner and of the fraudulent escrow company you dealt with. In many cases, you’ll discover that there’s no way to determine exactly where that escrow site is physically located. Give the police everything you know or think you know about both the escrow company and your trading partner, including any telephone numbers that are listed on the site or that you were provided.
State Attorney General
Provide your state attorney general with the same information you provided to your law enforcement agency. Additionally, if either the seller or the escrow site appears to be located in the US, you will need to file a report with the state attorney general of the appropriate states. If you can narrow down the location of either the escrow company or your trading partner to a local area, file also with the district attorney for those areas. The “ZIP Code, City and Phone Lookup” tool can tell you in which county a ZIP code or telephone number is located. It can help you determine which district attorneys or attorneys general you need to contact. These links will take you to lists of Prosecuting attorneys by area and Attorneys General by area.
US Federal Government Agencies
You should always file a report with one or more of the US federal government agencies if any of the parties to your transaction are in the US. While these agencies do not act on individual cases, they do act when the total loss due to a single scam exceeds a certain value; that value is said to be $100,000. If a fraudulent web site was involved in your transaction, your report should be against the web site rather than the individual trading partner. Given the numbers of transactions the fraudulent escrow sites engage in as well as the dollar amounts they deal with, most fraudulent escrow sites will quickly exceed this triggering point. Your report to these agencies is most likely to be pooled with other victims of the same fraud if you file it against the escrow site rather than your trading partner. Observations on eBay seem to suggest that the fraud artists set up many accounts and engage in only a fairly small number of transactions under each such account. By reporting against the escrow site, the numbers of reports and the dollar loss will more quickly arise to the level that get action.
Your report to these agencies will ensure that you are contacted should the fraud artists be caught. Reports to any of the agencies are also entered into the Internet Fraud Complaint Center (IFCC) data base which is the central repository for reports of internet fraud. When the people who defrauded you are apprehended, the IFCC database is searched for possible victims. The people who are identified are then contacted and asked to provide evidence against the fraud artists. This is the main reason you need to keep and maintain good records to support your story concerning your transaction. The better your evidence, the stronger your credibility and the more likely it is that the fraud artist will be punished. Quite often, part of that punishment is providing restitution to victims. You will be able to participate in such restitution only if you can prove that you were a victim of that fraud artist.
Here are links to some of the government agencies with which you can file reports.
- Federal Trade Commission (FTC)
- US Department Of Justice (USDOJ)
- Consumer Sentinel
- Internet Fraud Complaint Center (IFCC)
- National Fraud Information Center (NFIC)
- USPS Mail Fraud Complaint Form
How to report fake online auctions
If you find a auction is fake, it is all our responsibility to turn them in, and get that ad shut down right away, so no other victims lose any money. The scammer's house of cards comes crashing down. Now they have to get another account and start a new fake ad.
- eBay - Report Problems with Other eBay Members Form
- Yahoo Classifieds - Go to the Yahoo Classifieds Feedback Form and fill out your complaint.
How and where to buy a plasma television
Here at the Plasma TV Buying Guide we always suggest purchasing your plasma TV from a reputable store which offers professional sales and service advice. For more information please read our How and Where to Buy a Plasma TV/Monitor article.
- FTC: Internet Auctions: A Guide for Buyers and Sellers.
- Car Buying Tips: An excellent resource for all types of fraud.
- Fraud.org - National Fraud Watch Information Center.