Heading off auction scams

By DOUG GRIFFITHS

The call from the police comes first thing in the morning. "What do you know about stolen goods being sold from your online auction account?"

It's not as far fetched as it sounds. Over the past few months, online auction giant eBay has been hit by fraudsters who hijack legitimate eBay accounts to auction stolen goods, or worse, items that never existed in the first place.

Could it happen here? No, says Trade Me, New Zealand's largest online auction site - thanks to "proactive protection systems" and a good relationship with the police.

"As yet, account hijacking has not become an issue for Trade Me," says the company's general manager, Nigel Stanford.

He says the problem is addressed by ensuring Trade Me members maintain secure passwords and don't disclose them to anyone.

"As long as members make sure they are visiting only www.trademe.co.nz, and not some spurious address, we can assure them that they are safe."

The scam Stanford is referring to is what happened at eBay.

Scammers created bogus sites, which usually included some vague connection to eBay in the web address, and feature graphics and a layout similar enough to the real thing to trap unsuspecting victims.

In the hope of catching some people at inopportune times, messages are sent to random email addresses containing links to the fake sites and requesting eBay passwords be updated because of "account inaction".

If users are unfortunate enough to fall victim to the ploy their eBay accounts can be used.

Inadvertently aiding the fraudsters for a short time last year, eBay even published some users' actual email addresses next to the bids they had placed on online auctions.

When that blunder was discovered it was quickly corrected.

"All online and offline trading methods have a small proportion of fraudulent traders," says Stanford.

"On Trade Me we occasionally get complaints of people selling stolen goods or goods that they don't intend to deliver.

"We have a good relationship with the police and have assisted with several prosecutions."

Sam Morgan, who founded Trade Me in 1999 while still in his teens, agrees: "Fraud that results in a loss on Trade Me is quite rare.

"In the past we've discovered one schoolkid who was trying to sell his school's new PCs online.

"We can track everything that goes on for the purpose of evidence if need be.

"We co-operate fully with law enforcement agencies. In fact, a big chunk of our visitors come from the police firewall - so they are obviously watching," he says.

Stanford says the best way for buyers and sellers to protect themselves is to use the site's SafeTrader service (www.safetrader.co.nz), a third party that ensures sellers get paid and buyers get the goods.

"If a person doesn't use SafeTrader and they experience problems with a deal then we ask them to take the other party to the disputes tribunal, or contact the police if they have been a victim of fraud."

Auction leaders

* eBay started by Pierre Omidyar in 1995, has about 80 per cent of the online auction market.

* New Zealand's Trade Me was started in March 1999. Each week about 80,000 individuals use the service and about 10,000 new auctions are listed.

* Goods sold in the last quarter were valued at nearly $15 million. Actual earnings are undeclared as Trade Me is still a private company.

* Trade Me recently carried an auction for a $10,000 bank account which sold for more than $10,000!