Things to take note to prevent e-auction fraud when a consumer participating in an e-auction

Auctions are common in markets where the goods sold are valuable or when their prices can't be easily determined. The process of an auction aims to find a fair price for the goods by identifying buyers who need them the most. Such auctions are called forward auctions. In forward auctions buyers compete with each other by placing bids for the goods to be sold. Electronic auction (e-auctions) is auctions conducted through online.

There are some prevention methods for e-auction frauds such as:

• Escrow services. An escrow service is a licensed and regulated company that collects, holds, and sends a buyer's money to a seller according to instructions agreed on by both the buyer and seller. Typically, once the buyer receives and approves the item from the seller within an agreed time frame, the escrow service then sends the payment to the seller.

• Authentication service. Product authentication is a way of determining whether an item is genuine and described appropriately. Authentication is very difficult to perform because it relies on the expertise of the authenticators. Based on their training and experience, experts can often detect counterfeits based on subtle details. However, two expert authenticators may have different opinions about the authenticity of the same item.

• Verification system. Through verification, third parties will evaluate and identify an item through a variety of means. For example, some collectors have their item “DNA tagged” for identification purposes. This is a way of tracking an item if it changes ownership in the future.

• Feedback Forum. Feedback Forum allows registered buyers and sellers to build up their online trading reputations. It provides users with the ability to comment on their experiences with other individuals.

• Appraisal services. Appraisers use a variety of methods to appraise items, including expert assessment of authenticity and condition and reviewing what comparable items have sold for in the marketplace in recent months. An appraised value is usually accurate at the time of appraisal but may change over time as an item becomes more or less popular in the marketplace.

Referred link :

http://pages.ebay.com/help/tp/payment-escrow.html
http://wps.prenhall.com/wps/media/objects/260/267260/online_appendices/Turban-Appendix2A.pdf