Continued with the last topic in the Chapter 17 "Dynamic trading: E-Auctions, Bartering, and Negotiations" of the book "Electronic commerce 2010: a managerial perspective" writen by Efraim Turban talk about some ways to prevent electronic fraud in e-auctions.

The largest internet auctioneer, eBay, has introduced several measures in an effort to reduce fraud. Some are free; others are not. The company has succeeded in its goal: less than one tenth of 1 percent of the transactions at eBay were fraudulent in 2001.

The following are some of eBay’s antifraud measures.

1. User Identity Verification. eBay uses the services of Equifax to verify user identities for a $5 fee. Verified eBay User, a voluntary program, encourages users to supply eBay with information for online verification.




2. Authentication Services. Product authentication is a way of determining whether an item is genuine and described appropriately. Authentication is very difficult to perform because it relies on the expertise of the authenticators.




3. Grading services. Grading is a way of detecting the physical condition of an item, such as poor quality or mint condition. The actual grading system depends on the type of item being graded.




4. Feedback Forum. The eBay feedback forum allows registered buyers and sellers to build up their online trading reputation. It provides users with the ability to comment on their experience with other individuals.




5. Insurance Policy. eBay offers insurance underwritten by Lloyd’s of London. Users are covered up to $200, with a $25 deductible. The program is provided at no cost to eBay users.




6. Escrow Services. For items valued at more than $200 or when either the buyer or seller feels the need for additional security. With an easy-to access link of a third-party escrow service, both partners in a deal are protected. The buyer mails the payment to the escrow service, which verifies the payment an alert the seller when everything checks out. At that point, the seller ships the goods to the buyer. Afer an agreed-upon inspection period, the buyer notifies the services, which then sends a check to the seller.




7. Nonpayment Punishment. eBay implemented a policy against those who do not honor their winning bids. To help protect sellers, a first-Time nonpayment by a buyer result in a friendly warning. A sterner warning is issued for a second- time offense, a 30 day suspension for a third offense, and indefinite suspension for a fourth offense.




8. Appraisal Services. Appraisers use a variety of methods to appraise items, including expert assessment of authenticity and condition and reviewing what comparable items have sold for in the marketplace in recent months. An appraised value is usually accurate only at the time of appraisal.




9. Physical Inspection. Providing for a physical inspection can eliminate many problems. This is especially true for collectors’ items.




10. Buyer Protections. The Paypal protection program shields buyers by covering you to $500 of their purchase at no additional cost. The eBay Standard Purchase Protection Program provides up to $200 coverage for items that are not received or items that are not as described in the listing.




11. Spoof (Fraudulent) Web Site Protection. The eBay Toolbar with Account Guard enables eBay members to protect their accounts by indicating when they are on an eBay or PayPal site.




12. eBay Security Center. The eBay Security Center provides guidance on buying safely, selling safely, and paying safely, as well as valuable third-party, government, a law-enforcement resource. The Security Center is a valuable resource for all users, from first-time buyers who want information on safeguarding online transaction to high-volume sellers who want to protect their copyrights.

I hope with this topic, create in you trusty more in the e-auction and lost the fear to sell or buy something in this type of B2C-B2B companies; and if you manage an e-auction site, I hope you learned other options to prevent the electronic fraud in your e-auction.

Atte.
Cecy

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.