Cyber Crime: Internet Auction Fraud

According to annual report on Internet crime released on 2010 by IC3 (Internet Crime Complaint Centre), the report demonstrates that the online crime has become, affecting people in all demographic groups throughout the country. IC3 received an average 25,317 complaints for cyber crime per month in 2010. Non-delivery of payment or merchandise accounted for the most complaint which is 14.4%. Such Non-delivery of payment or merchandise is one of the types of Internet Auction Fraud. Out of all victims reported that 34% victims don't know about the gender of fraud maker. There are several ways to occur Internet Auction Fraud but the most common fraud is the non-delivery of the purchased item. Internet Auction Fraud involves following list of frauds. Non-Delivery In this type of fraud, seller places an item for bid over internet, but the item is never delivered to the buyer once he/she makes the payment. In addition to this, if the buyer pays by credit card, the seller will obtain their personal information and credit card number information which is sensitive data. Misrepresentation In such fraud, the purpose of seller is to deceive the buyer as to the true value of an item. This can be as simple as displaying false information about the item that is up for bid. Seller might change the picture after purchase of that item in better condition than it really is. Triangulation This fraud includes three parties: The scam operator, a consumer and an online merchant. The scam operator buys goods from an online merchant with stolen identities and credit card number. Then, the scam operator sells those goods at online auction sites to buyers. Next, the scam operator has the buyer to make wire transfer the money and then sends the goods to the buyer. Here, buyer becomes the target of stolen goods investigation. They buyer and online merchant become the victims. Fee Stacking To obtain more money, the seller adding hidden charges to the item after the auction is over. The seller adds extra charges for postage, handling, and the shipping container, instead of a flat rate for postage and handling. And as a result the buyer has paid a lot more for the item than what he/she had predicted. Black-Market/Counterfeit Goods This includes the offer for sale on Internet Auction Sites. It includes copied software, music CDs, brand items, Videos, etc. These goods are delivered without a box, warranty, or instruction. Multiple Bidding It is used to buy an item at a lower price. The buyer places multiple bids with different name with high and low price on the same item. The multiple high price bids by the same buyer cause the price to be increased, which scares other potential buyers from bidding. Then, in the last few minutes of the auction, the buyer withdraws their high bids to purchase the item with their low price bid. Shill Bidding It is an international fake bidding by the seller to increase the price of his own item that is up for bid. This is done by the sellers themselves making bids on their own items purposely to increase the price of his item. International Auction Fraud International Auction fraud is the most prevalent of Internet crimes associated with eastern European countries. The subjects are more flexible with victims to send half funds now and half when the item arrives. The money is generally transferred via wire transfer. To receive funds via wire transfer, the receiver must provide the complete information of the sender and the receiver's full name and address. The funds can be withdraw from anywhere in the country using this information. It is not required to provide money transfer control number (MTCN) and the answer to any secret question.