25 Percent of New York Online Auction Users Scammed

"Online auctions are great for bargains, quirky merchandise and collectibles, but you need to know what you are doing."

by / October 2, 2008

Online auction fraud ranks first among the types of complaints New York state consumers make about the Internet to state and federal officials. According to a recent statewide survey by Consumer Reports WebWatch, the Internet integrity division of Consumers Union, the non-profit publisher of Consumer Reports magazine, 27 percent of New York state residents who have ever used an online auction Web site, such as eBay or Amazon, have experienced a scam or deceptive practice -- 32 percent of eBay users were scammed.

The survey, which focuses on online fraud, was commissioned by Consumer Reports WebWatch, which evaluates the credibility of Web sites and advocates for consumer-focused Internet policy and governance. The full report is part of Consumer Reports' free Online Security Guide, which has launched to coincide with National Cyber Security Awareness Month.

Common Complaints of Online Auction Users

Eleven percent of users of online auction sites reported that they never received the goods they bid on, making it the most common complaint. Additionally, seven percent of survey respondents who received their goods said that they were not in the condition that they expected. Other common complaints included not being told a key detail about the item before it arrived (7 percent) and being sent an item of lesser value than the one they actually bid on and won (7 percent).

"Online auctions are great for bargains, quirky merchandise and collectibles, but you need to know what you are doing," said Beau Brendler, director of Consumer Reports WebWatch. "Con artists, rip-off specialists and sophisticated criminals can catch you at every step of the process, from bidding to payment to shipment."

"Using online auction sites is just one of the many ways that consumers can get stung online," said Jeff Fox, technology editor, Consumer Reports. "Our free Online Security Guide offers consumers tips, tricks, and advice for protecting themselves from a variety of Internet threats -- there's even a new animated video and an interactive quiz to teach consumers about e-mail scams."

Other survey highlights include:

Online Auction Sites New Yorkers Use the Most

  • Survey respondents who reported using an online auction site used the following sites the most: eBay (52 percent), Amazon (45 percent) and Overstock (21 percent).

Doing Research

  • Almost 40 percent of respondents said that because they have experienced some type of auction fraud, they would do more research on sellers before bidding.
  • Despite the sometimes risky nature of online auctions, 57 percent surveyed said they did not read any information about online auction fraud before placing a bid.

Avoiding Online Auction Sites

  • Only 12 percent of respondents said they would stop bidding on auction sites altogether as a result of their experience with online auction fraud.
  • About 20 percent of respondents said they would no longer buy certain types of products on auction sites. Among age groups 18-24 and 25-34, the number was even higher -- 31 percent.

Solving Problems

  • When confronted with some kind of fraud, more than 50 percent in most age groups said they tried to resolve the problem directly with the seller.
  • About 40 percent said they filed a formal complaint with PayPal, the online payment service owned by eBay.
  • More than 25 percent left negative feedback for the seller.
  • In general, few respondents chose to contact law enforcement, a lawyer, or the U.S. Federal Trade Commission.