FTC targets Internet auction site con artists

Buyers should identify the seller, its feedback rating and terms and conditions of the sale

In a coordinated law enforcement initiative targeting con artists who prey on Internet auction users, the Federal Trade Commission, Department of Justice, U.S. Postal Inspection Service, National Association of Attorneys General and other federal, state and local law enforcers announced Feb. 14 a three-pronged effort to stem the fraud faced by Internet auction-goers.

Law enforcement authorities announced they have taken more than 35 law enforcement actions already and have many more in the pipeline. Tips to the fraud, which involves non-delivery among other offenses, come from auction sites and consumers who have been conned, according to a release from the Federal Trade Commission.

The Internet auction fraud initiative was announced on the first day of National Consumer Protection Week a public/private campaign to provide armchair shoppers with tips for safe shopping from home.

While the campaign offered suggestions to help consumers who shop online, through catalogs and by telephone, Internet auction transactions, which attract millions of consumers a year, are a special focus.

"We know that with the dramatic expansion of e-commerce, Internet auction sites are experiencing amazing growth," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection.

"We also know that the number of complaints the FTC has received about Internet auctions is exploding from 107 in 1997 to 10,700 in 1999. We want Internet auction users and the online auction industry to know that the e-con artists who capitalize on them are going, going, gone.' We don't intend to let a handful of rogues erode consumer confidence in Internet commerce or Internet auctions," Bernstein said.

In conjunction with National Consumer Protection Week, the FTC launched a three-point program combining law enforcement, training of other federal and state law enforcers about how to track and prosecute Internet scammers, and a consumer education campaign to stem consumer fraud in Internet auction transactions. Federal and state enforcers have filed 35 law enforcement cases to date and are poised to follow up many open investigations with law enforcement.

"We've trained state and local law enforcers from Florida to California to seek-out and prosecute Internet fraud," Bernstein said.

"The Internet has created tremendous opportunities for communications and commercial transactions; unfortunately, it has also created new opportunities for cyber rip-off artists intent on ensnaring victims in the World Wide Web," said Assistant U.S. Attorney Christopher M.E. Painter, the computer crimes coordinator in Los Angeles. "Consumers who use the virtual world to exchange information and to purchase goods should expect the same protections offered in their hometowns."

"My advice is to first and foremost do a little research before buying anything by mail, phone or over the Internet," said Maryland Attorney General Joe Curran. "Know who you're dealing with and what their policies are, and pay the safest way, which is usually by credit card."

The FTC advises consumers who buy items through Internet auctions that they should:

Identify the seller and check the seller's feedback rating;

Do their homework. Be sure to understand what they're bidding on, its relative value and all terms and conditions of the sale, including the seller's return policies and who pays for shipping;

Establish their top price and stick to it; and

Evaluate their payment options. If possible, they should use a credit card because it offers the most protection if there's a problem. If the seller doesn't accept credit cards, buyers should consider using an escrow service.