In the Chapter 17 "Dynamic trading: E-Auctions, Bartering, and Negotiations" of the book "Electronic commerce 2010: a managerial perspective" writen by Efraim Turban said that According to the National Consumers League (nclnet.org) and NCL’s National Fraud Information Center, of all of the e-commerce activities conducted over the internet, fraud was the most prevalent and serious in e-auctions until 2005.

Type of e-auction fraud

Fraud may conducted by seller, buyers, or other.

1. Bid Shielding. The use of phantom to bid at a very high price when an auction begins is called bid shielding. The phantom bidders pull out at the last minute, and the bidder who bids with a very low price wins.

2. Shilling. A similar type of fraud can be conducted by sellers. In this fraud sellers arrange to have fake bids placed on their items to artificially jack up bids.

3. Fake Photos and Misleading Descriptions. Some sellers distort what they can truly sell or fail to disclose all relevant information about the items.

4. Improper Grading Techniques. A seller might describe an item as 90 percent new, whereas the bidder, after receiving the item and paying the full amount, feels that it is only 70 percent new.

5. Bid Siphoning. Luring bidders t leave a legitimate auction by offering to sell the same item at a lower price.

6. Selling reproduction as originals. A seller sells something that the seller claims is original, but it out to be a reproduction.

7. Failure to pay. Buyers do not pay after a deal is agreed upon.

8. Failure to pay the Auction House. Sellers fail to pay the auction’s listing or transactions fees.

9. High Shipping Costs and Handling Fees. Some sellers just want to get little more cash out of bidders. Postage and handling rate vary from seller to seller.

10. Failure to ship merchandise. Money was paid out, but the merchandise never arrives.

11. Loss and Damage Claims. Buyers claim that they did not receive an item or that they received it in damaged condition and then ask for a refund.

12. Fake Escrow Services. Presenting itself as an independent trusted third party, a fake services will take the seller’s items and the buyer’s money and disappear.

13. Switch and Return. The seller has successfully auctioned an item, but when the buyer receives it, the buyer is not satisfied. The seller offers a cheerful refund. However, what the seller gets back is mess that does not much resemble the item that was originally shipped.

14. Other Frauds. Many other types of fraud also are possible, including the sale of stolen goods, the use of false identities, providing false contact information, and selling the same item to several buyers.