By some estimates, rip-offs occur in less than one percent of all online auction transactions. This sounds very low, and yet if you auction several hundred items per year, you can almost always count on encountering at least one or two troublesome buyers and maybe a cyber-thief or two during that time.
Using realistic-looking Web sites, cyber-thieves have concocted everything from fake banks to fake escrow companies and fake drop-ship companies, all set up to victimize online auction sellers. This point cannot be stressed enough:
This means finding their phone book listing, calling them, and getting a business-location address — a real location, not a post office box — and verifying that address. You may also need to call a Better Business Bureau office in the same city to see if they have a listing for the company and if any complaints have been lodged against it. Depending on the amount of business you expect to do with an escrow company, drop-shipper, or bank, you may also need to get credit references.
Never rely on Web site postings alone to verify a business. What seems to be a fully functioning online bank in Detroit actually may be a digital front for crooks overseas who are using the site to steal money, credit card information, and auction goods.
Yes, the process can be time-consuming. It may also cost you few dollars in phone calls. But your losses can be severe if you deal with a fraudulent buyer who pays you with counterfeit money orders or counterfeit cashier's checks, and then gets away with your merchandise and gets you in trouble with law enforcement and your creditors.