Avoid coin auction frauds
Most people who complain to the FTC about Internet auction fraud report problems with sellers who:
- fail to send the merchandise
- send something of lesser value than advertised
- fail to deliver in a timely manner
- fail to disclose all relevant information about a product or terms of the sale
Some times coin dealers who hold on-line auctions use them to dumb inferior material, that is
coins that are hard to sell in traditional auctions or in a person-to-person transaction. The inability of the buyer
to examine the coin carefully assists them in this practice, as the images posted on auctions can not be used to
accurately assess the grade of a coin.
But some buyers experience other problems, including:
- "bid siphoning," when con artists lure bidders off legitimate auction sites by offering to sell the "same"
item at a lower price. Their intent is to trick consumers into sending money without proffering the item. By
going off-site, buyers lose any protections the original site may provide, such as insurance, feedback forms or
- "shill bidding," when fraudulent sellers or their "shills" bid on sellers' items to drive up the price.
This is a very common form of fraud, which unfortunately is currently regarded almost as legal
- "bid shielding," when fraudulent buyers submit very high bids to discourage other bidders from competing
for the same item and then retract those bids so that people they know can get the item at a lower price
Another type of fraud occurs when sellers or buyers pose as escrow services to improperly obtain
money or goods. The so-called seller puts goods up for sale on an Internet auction and insists that prospective
buyers use a particular escrow service. Once buyers provide the escrow service with their payment information, the
escrow service doesn't hold the payment: The payment goes directly to the so-called seller. The buyer never
receives the promised goods, can't locate the seller, and, because the escrow service was part of the scheme, can't
get any money back.
In some cases, a fraudster poses as a buyer and, after placing the winning bid on an item,
insists that the seller use a particular escrow service. The escrow service tricks the seller into sending the
merchandise and doesn't send the payment or return the goods to the seller.
Counterfeit and ancient coins
Fakes of modern and ancient coins sold on eBay as authentic coins are a frequent problem, though
if you follow the online coin discussion groups, these coin forgeries are frequently exposed. One common scam is
for a seller to create an auction of a counterfeit coin, or many counterfeit coins, while preventing people from
contacting bidders, which is the most common way that this kind of fraud is stopped (despite the fact that doing
this is against official eBay policy). Never buy from a seller who does this unless you know who the seller is.
One scam involving ancient coins has been running on eBay for about two years. The seller puts up
for auction every couple of weeks the same several dozen cast counterfeits using a new eBay I.D. each time. All are
private auctions. The scam artist always changes the categories of his auctions about a day before they close,
meaning people following coin auctions don't see them until then. This gives inexperienced buyers enough time to
bid on them but doesn't give eBay enough time to act on complaints from those more experienced who know about this
scam. With each new I.D., the scammer sometimes creates feedback for himself by buying about a dozen inexpensive
non-coin items, while other times he keeps his own feedback private as well. eBay typically cancels each new I.D.
this scammer creates (though not always), and each time it sends out warning emails to winning bidders, but often
this is after they have already paid. Many hundreds of people have been scammed out of tens of thousands of dollars.
You shouldn't count on eBay to prevent or stop the auction of even the most blatant modern or
ancient counterfeits or prevent sellers with a history of selling large numbers of counterfeits from engaging in
online fraud. eBay has a policy of noninterference, stating that it's just a venue bringing buyers and sellers
together. You're largely on your own.