1. FAKE AUCTION
DEFINITION
Auction fraud is defined by the Internet Crime Complaint Center as “fraud
attributable to the misrepresentation of a product advertised for sale through an Internet
auction site or the non- delivery of products purchased through an Internet
auction site.”
2. FLOWS OF FAKE AUCTION
• There's something about an auction that gets people's blood flowing. Gets
their cash flowing, too.
• People part with thousands of dollars because they believe they've "won"
something rather than "bought" something. Often they overpay. You can
bid your way to a bargain at an auction, as long as you remember an old
warning with a new twist: bidder beware.
• Government auctions are so popular that copycats try to make their
auctions seem like government auctions to lure customers. This is just one
of many sleazy tactics used by traveling auctions held in hotel rooms and
other rotating sites.
• Traveling auctions usually advertise in newspapers or send out direct mail.
Beware of ads with statements like this: "AUCTION of goods previously held,
sold and released by GOVERNMENT AGENCIES and POLICE DEPARTMENTS!"
• Unschooled readers might miss the fine print and mistake this for a
government auction. It's a ploy. All it means is that the traveling auctioneer
himself attended a government auction and bought one or two things that
he's now going to try to resell at a huge mark up. That's if he attended a
government auction at all.
3. STEPS OF FAKE AUCTION
4 Steps to Buying at Auctions
Step 1: Registration
• A buyer needs to register for a sale by providing their name, address, identification
number and payment details, no later than 48 hours prior to an auction. First-time
buyers must also provide their credit information.
Step 2: Bidding
• After buyers successfully pick up their paddle, the real fun begins. They enter the
salesroom and wait for the auctioneer1 to commence the sale.
4. STEPS OF FAKE AUCTION
Step 3: Payment
• Immediately after the sale, the buyer must pay the full amount due (comprising of
the hammer price4, buyer’s premium5 and any applicable taxes) within the
deadlines set by the auction house. Payment can be made by cash, cheques, credit
card, banker’s draft and telegraphic transfers, in the currency where the sale was
conducted. If the payment is made in another currency, the auction house will
charge the buyer the currency conversion costs.
Step 4: Collection and Shipping
• It is the buyer’s responsibility to collect their purchases and pay for all the
delivery, shipping and insurance costs.
