More and more transactions are being carried out online and over a wider array of sites — Craigslist, Etsy, Cars.com, eBay, etc. Unfortunately, when money is involved there's someone out trying to take advantage. Click past the break for some of the top online scams, and learn what to look for so you don't fall prey to their tricky tactics.
Scams benefit from our human nature — we want that good deal to come fly in our laps, and we want to trust people. It's very easy to believe you're dealing with an honest person, but when using the internet we have to exercise extra caution. Listed below are the top 3 scams circulating the 'nets when buying and selling items.
The Distant Buyer Scam
common on Craigslist
This scam is likely to happen if you're selling a fairly expensive item in Craigslist land (over $200). An email will arrive from someone who is very interested in what you're selling but happens to be in a distant location (another state or city). However, they conveniently have an agent of some sort in your area (be it a secretary, or courier). They'll pique your interest by saying they want to make an instant purchase, and are willing to even pay more than your list price to act fast. All they ask in return is your personal information (name, address, phone number), so they can send you a check.
Here's an example email of how this scam can start...
Thanks for the prompt response, I am satisfied with the explanations and condition stated at craigslist and i will love to make an instant purchase.
I will pay an extra $50 for the posting to be taken down from Craigslist.I should be rest assured that the item is reserved for me and will also like you to know that i will be paying via bank check, which will be over night payment due to the distance .You also dont need to bother yourself with the shipment, my secretary will take care of that. I will need you to provide me with the following information to facilitate my secretary to cut the check.
Your full name,Your mailing address be it residential or postal address, and Your phone number.
Once again ,I will like you to know that you will not be responsible for the shipping.
I will have my mover come over as soon as you have the check.
Once you get that far, stop communication with the potential buyer and/or report them to the site where the item is posted. Most sites have a direct email for dealing with fraud and scams.
Let's say you went along with it though, what happens next? How does getting a check in the mail turn into a scam? The cashier's check they send is a fraudulent one, and most likely listed at a price a few hundred dollars above your list price. Its likely the bank will cash the check in earnest, as it will take days (or longer) before the check can be verified. At that point you may feel like the transaction is legit, and send along the product they 'purchased' according to their arrangements. The scammer may then ask you to wire them the cash difference — between the check they wrote out to you and the list price of the item. They'll provide a fake name and address (which Western Union or Moneygram will not likely verify) and if you comply you'll be out your item and the few hundred dollars. Scammed.
The Distant Seller Scam
common on Cars.com, Autotrader.com
In this scam, the scammer entices you with a car for sale listed thousands below the market price. Interested in the listing you contact the seller for more information — can't hurt right? The scammer then claims to be a divorced woman, looking for quick sale of the car. Usually this is followed up with an email requesting your personal information so they can have 'Paypal' initiate the transaction on their behalf.
Here's a sample email...
The price is below the market as I recently divorced, therefore I don't need it, so I'm trying to sell it as soon as possible. First please let me explain you the process of this sale and afterwards you can decide if you want to go with it or not. I'm in the city but my presence won't be necessary as I prearranged the deal with PayPal. The car is at the shipping yard, ready to be delivered. You benefit of free delivery, having it delivered at your address in less than 5 working days. Afterwards you will have 5 days to test and inspect the car prior to make any purchase. If by any reason you find something you don't like about it, you can send it back at my expense. If you are settled in buying it I will need the following details from you: full name, address, and phone#.
Once I have your info I am going to forward it to PayPal to get things started. After that PayPal will contact you with all the information that you need in order to buy it. This will be your proof that I am a covered and legitimate seller. Waiting for your email with the requested details.
Again we're dealing with a remote person who is unable to meet because they are too busy. They ask you to rest assured though, because everything has been arranged with some 3rd party (Paypal, eBay Motors, Amazon Payments, Fake Shipping company). None of the big name sellers listed do transactions like these, on anyone's behalf, as the scammer claims. If you follow through, the scammer will simply send you through a fake website (mocked up to look like the real thing), send you fake forms to fill out, or have someone call you pretending to be that company. Either way, they'll get your payment information and no car will arrive.
The Chargeback Scam
common on Etsy and eBay
The last scam we'll look at today is particularly tough to catch. That's because communication is limited and the sale goes through like one would expect. In this scenario, an item you have listed for sale is bought and paid for legitimately through Paypal. With the buyer's obligations fulfilled, you then act on your responsibility (as the seller) and ship the item out to them. Weeks later, the scammer files a dispute or chargeback with Paypal, claiming that the item wasn't received or was misrepresented. Paypal, acting to protect buyer's rights, is likely to side with them and your account will be deducted the sale price and you're out the item you shipped as well.
This one is rough, but there are things you can do to put yourself in a good position to avoid it.
- Only sell your big-ticket items in the continental US. This makes it easier to track in the case of a dispute.
- Only send to Confirmed Paypal addresses. It's common for people to ask for shipping to unconfirmed addresses and it doesn't mean they are scamming you. But try to abide by this rule to protect yourself. List clearly in your ad that you will only send to confirmed addresses, and also be sure to state that in all communication with potential buyers.
- Document each step of the sale. Take pictures of the item shipped out, tracking numbers, and keep emails saying it was delivered.
- Follow-up with buyer after product delivered. Try to get them to state in email that the product was recieved and they are satisfied.
Keeping all that information will likely be enough to help you sway Paypal into siding with you and realizing you were the victim of a chargeback scam.
Lessons to Learn
- If someone is contacting you and claim to either be remote, or too busy to meet you in person it's likely a scam. Stop communication and/or report them.
- If someone proposes an out of the ordinary transaction, or wants to handle the sale through a 3rd party, it's likely a scam. Stop communication and/or report them.
- Only send to confirmed addresses, and log all transaction details for items sold
- Don't deal with checks or money order. Use cash whenever possible.
The internet is amazing, but it can also be a scary place. Just proceed with caution and trust your gut instinct. If you have the thought, even for a moment, 'is this a scam?', then it likely is. Be careful out there.
Have you ever been victim to one of these scams? What scams have happened to you?
(Images: Chris Perez)