Prevention of e-auction fraud

Nowadays, the increasing popularity of the Internet that is used for the purpose of commerce has caused an increase in Internet fraud. This has raised new and challenging legal issues about online auctions. The Internet has the capacity to reach a global audience, so the users may find it difficult to distinguish genuine source of information from fraudulent sources and result in e-auction fraud. This is often happen when the sellers conduct the auctions of goods through the online auction sites by using Internet and the buyers do not have the opportunity to examine the offered goods. Sometimes, the online auction seller may even list out the things that do not exist for sale. Thus, consumers must take note to prevent e-auction fraud when participating in an e-auction.

Firstly, the consumers can rely on the escrow agent to prevent the e-auction fraud. The escrow agents will hold their funds until the purchased item arrives, in the promised condition and eventually pay the funds to the sellers.

Secondly, the consumers should evaluate the existence and quality of the merchandise offered for sale as a condition on the auction site. The consumers should get the appraisal from a licensed expert to ascertain the validity when purchasing some items that are very valuable.

Thirdly, the consumers must be aware of the authentication of the identities of all sellers. They can request the identity validation to be done through any reputable credit agency.

Lastly, they can purchase the insurance that is provided by the online auction sites in a reasonable price to cover the full amount of their transactions. Hence, even if there is an e-auction fraud, the consumers can still being compensated by the online auction sites because the online auction sites are still quite reliable. The reason is that the online auction sites control the procedures that take place in their sites, so the online auction sites are in a good position to prevent fraud. In addition, the online auction sites have been superimposed to follow specific steps by a comprehensive regulatory scheme to prevent fraud. Thus, if the online auction sites fail to adequately comply with the regulations, they will face the financial liability.