Auction fraud complaints reach 71.2% 

Unlike this obvious scam, but the REAL fraudsters look like real deals, with great prices!

 
MERCHANT ADVISORY: INCREASED USE OF “POSTE RESTANTE”; GREATER SCRUTINY REQUIRED BY MERCHANTS 

The Internet Crime Complaint Center (IC3), a division of the FBI, has identified an increase in the number of fraudulent transactions with online orders made using “poste restante”, a term with worldwide meaning, “leave the package at the post office.” 

The IC3 has specifically uncovered an inordinate number of high-end electronic products being shipped to Russia marked “poste restante.”  We are advising all merchants who ship internationally to review all orders marked “poste restante.”  The packages, which may have been acquired through traditional fraud schemes such as auction fraud and bride schemes, rest at the post office until they’re picked up by the named addressee.  

The orders require increased scrutiny because they are not always by flagged by traditional address verification tests. A typical fraudulent package would read:  Ship To:  Nastia Scamsalot, 10552 Poste Restante, Moscow, Russia

  
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According to the IC3 2004 Internet Fraud - Crime Report, in the period January 1, 2004—December 31, 2004   Internet auction fraud was by far the most reported offense, comprising 71.2% of referred fraud complaints. This represents a 16.7% increase from the 2003 levels of auction fraud reported. In addition, during 2004, the non-delivery of merchandise and/or payment represented 15.8% of complaints (down 24.4% from 2003), and credit and debit card fraud made up an additional 5.4% of complaints (down 21.7% from 2003). Check fraud, investment fraud, and confidence fraud complaints that remained within the IC3 structure represented a mere 2.3% of all remaining complaints. Identity theft, computer fraud, Nigerian letter fraud, and financial institutions fraud complaints represented less than 0.8% of all complaints combined.

The Internet Crime Complaint Center (IC3) monitors criminal matters having a cyber (Internet) nexus. The 2004 Internet Fraud Report is the fourth annual compilation of information on complaints received and referred by the IC3 to law enforcement or regulatory agencies for appropriate action. In 2004, the IC3 website received 207,449 complaint submissions. This is a 66.6% increase over 2003 when 124,509 complaints were received. These filings were composed of fraudulent and non-fraudulent complaints primarily related to the Internet. The report was prepared by the National White Collar Crime Center and the Federal Bureau of Investigation

This level of auction fraud is frightening.  We used to reference eBay as a place for our merchants to procure inexpensive PDA phones to use with our service, but we are re-thinking that position now, and recommend that our users purchase only from known, reputable sources.

Misrepresentation: One of the oldest tricks in business. Just what it sounds like. Or more accurately, the merchandise ISN'T what it sounds like. Value, authenticity or condition may be overstated, sometimes wildly.
Failure to ship merchandise: The merchant takes your money and runs, leaving you nothing but a lighter wallet for your troubles.
Failure to pay: Through the use of fake money orders, bounced checks, stolen credit cards, or a number of other techniques, the buyer gets the goods and leaves the merchant with nothing in return.
Shilling: Artificially inflating the price on an item by use of fake bids from phony user IDs or accomplices.
Bid Shielding: Using high bids from phony accounts to run up the price and scare off potential buyers, the actual bidder then retracts the higher bids, getting the item at a much lower price than he would have otherwise.
Piracy and counterfeiting: The sale of pirated music and software or counterfeit art, phony jewelry or gems, and forged collectibles.
Internet Fencing: Selling stolen goods through the auction.
Triangulation: The seller offers to send you the item (usually new, brand name goods) on approval. They then use stolen credit cards to order the item shipped to you. You pay for the goods (in cash) after receiving them, and get a visit shortly thereafter from the police. Credit card fraud and theft.
The "Buy and Switch": The buyer gets the merchandise and returns a similar item that has been damaged, or a fake, with the claim, "It isn't what I expected." The seller refunds their money, and is left with broken and unresellable product.
Fee stacking: Fees, usually "related" to shipping costs, are added to the cost after the sale has been made.
Shell Auctions: No merchandise exists. The sole purpose of the auction is to get money or credit card numbers from unwary buyers.

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