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Auctions can be a good way to buy an expensive item at a significant discount. However, scammers know the promise of a “good deal” is an excellent way to lure unsuspecting victims. Even if an auction appears legitimate, potential bidders should be wary. BBB Scam Tracker has received several reports of fake auctions phishing for consumers’ personal information and money.
How the scam works
You see an ad for a website auctioning cars, motorhomes, boats and other big ticket items. You visit the website, and everything seems legitimate. The site might even claim to be affiliated with the government. You register to bid, which may include sending the auctioneer a copy of your driver’s license, along with other sensitive personal information.
After you register, you place a bid on an item. To your surprise, you win the item for a price that seems almost too good to be true. The auctioneer gives you instructions on how to transfer the money. Once you’ve paid, the auctioneer will likely disappear and become impossible to contact. The item you won is never delivered. Unfortunately, you just gave money and personal information to a scammer!
One consumer reported the following experience to BBB Scam Tracker: “I ended up bidding on a 2019 Nissan Titan pickup with 17,000 miles. Much to my surprise, I got a notice that I won. The next day, they sent to invoice so I could bank transfer the funds. What they sent looked like a person in GA and not a business in Oklahoma, so I called… I kept asking questions, and he at last said that they were going to cancel the sale and I said fine.”
How to avoid auction scams
- Research auctions and auctioneers before participating. If an auction claims to be a “government” auction, reach out to the branch of government hosting the event to make sure it’s legitimate. If you’re looking at a private auction or an auction ran by a private company, look into the auctioneer ahead of time. Look carefully at reviews from previous buyers. Does the auctioneer have a good reputation? Do they have the appropriate licensing to conduct the auction? If the answers are no, or there is no information available about the auctioneer, it may be best not to participate.
- Get to know the terms and conditions of the auction. Find out whether there are entry fees, winning bidder fees, taxes, or shipping costs you’ll be responsible for paying. Winning an auction may not be as simple as paying the price you offered. Plus, scammers may try to hustle you out of “entry fees” or “pre-bid deposits” without even having any real items in their auction.
- Don’t give in to bidder’s excitement. Don’t make impulse buys when participating in auctions. Scammers will be counting on you to get wrapped up in the excitement and could even prod you into a fake bidding war to get more money out of you. Even when you are on a reputable auction website, set a spending limit and stick to it. If an item goes over your budget, don’t buy it.
- Understand how auction sites work. Check each auction website’s rules and policies carefully. Pay special attention to what buyer protections the auctioneer has in place. Find out what policies apply if an item is not delivered or is significantly different from its description. Each site may have different rules and procedures. If a website offers no buyer protection at all, consider it a red flag.
- Find out how payments are made. Know how and who you will pay before you place a bid. If the seller insists on using a payment method you are unfamiliar with, do some research. If the payment service doesn’t have a customer service line you can contact to find out details about how the service works, don’t use it to make a payment.
- Check the seller’s contact information. The same goes for the seller or auctioneer. Check out their website and look for valid contact information. If you can’t reach anyone, or if you do speak with someone who is uncomfortable answering your questions, don’t participate in their auctions.
- Be careful with your personal information. Be sure you trust a website, company, or auctioneer before you divulge your personal information. Once your information is in the hands of a scammer, you won’t be able to get it back.
For more information
See the BBB Tip: Smart shopping online for more ways to safely make online purchases. Review the information at BBB.org/AvoidScams regularly to stay alert to common scam tactics.
If you spot an auction website that appears to be a scam, report it at once to BBB.org/ScamTracker. Your report can help other consumers avoid falling prey to scammers’ tricks.