Tips For Cyber-Bidding

The following is from a consumer alert issued by the Federal Trade Commission's Bureau of Consumer Protection. This information should help protect you from fraud if you are considering participating in an online auction.

Bidding online is not exactly like going to a traditional auction. For one thing, online auctions houses don't actually have the merchandise you are bidding on. Like a traditional "live" auction, the highest bidder "wins." That's where the similarity ends.

Because an online auction house doesn't have the merchandise, the highest bidder deals directly with the seller to complete the sale.

If you're the highest bidder, the seller typically will contact you by email to arrange for payment and delivery. Most sellers accept credit cards. Or, you can use a third-party escrow agent to collect your payment and the product you're buying, and process delivery of each. Be cautious if the seller asks you to pay by certified check or money order.

Some online sellers have put items up for auction, taken the highest bidder's money, and never delivered the merchandise. Consumers who paid by certified check or money order had little recourse when it came to getting their money back.

Follow these tips before you bid in an online auction:

  • Try to pay by credit card. If you don't get the merchandise you can challenge the charges with your credit card issuer.
  • Ask about using an escrow agent or paying by COD. Most ecscrow services charge a fee, so you may want to consider this option only for larger purchases.
  • Verify the seller's identity. If you can't, consider this a red flag and avoid doing business with the seller. Some sellers may use a forged email header, making it impossible to contact them if you need to.
  • Ask how you'll get follow-up service, if you need it. Many sellers don't have the expertise or facilities to provide service for the goods they sell. Is this important to you?
  • Avoid impulse bids and purchases. Online auctions may be enticing, but are you really getting the best price?
  • Ask about return policies. Returning merchandise to an online seller may be difficult.

    For more information about fraud on the Internet, visit the Federal Trade Commission.

    From the Office of Consumer and Business Education, US Federal Trade Commission