CYBER CRIME - Online Auction Scams


Sheriff Bill Gilkey and Prosecuting Attorney Tom Tatum, II, issued a public advisory to let citizens be aware of some common Internet fraud techniques that have been used against citizens of Yell County recently. Sheriff Gilkey reported that the Sheriff�s Office has been receiving complaints of various forms of Internet and computer related fraud in the last few months, and officials need to the get the word out to the public to be aware of these schemes in order to keep them from becoming a victim themselves.

According to Det. John Foster, Jr., of the Criminal Investigative Division of the Sheriff�s Department, the most recent scheme to surface is a variation of the �Nigerian 419 Advance Fee Scheme� that has been documented by federal law enforcement authorities for some time. This scheme is becoming more common, and that it almost always involves individuals from Nigeria utilizing web-based E-mail accounts such as �Yahoo�, �Hotmail� or others.

The suspect will usually contact a seller and offer to purchase an item that has been listed for sale on-line. The items are always of significant value, and vehicles seem to be their favorite. The suspect will offer to pay the seller what they are asking for the vehicle or even more, and will explain that they have a �client� in some other location that already owes them money. They will tell the seller that they will have this client to send the seller a cashier�s check for an amount usually several thousand dollars more than the sale price of the item. Then all the seller has to do is cash the check and keep the amount they are getting for their item and then forward the remaining amount to the suspect or his �shipper� at yet another location. They instruct the seller that their client will come pick up the item at a later time, or that shipping arrangements will be made later.

The problem occurs several weeks later, long after the cashier�s check has been cashed at the local bank and thousands of dollars have been sent overseas, often by wire transfer at the suspect�s request. Suddenly the seller will be contacted by their bank and informed that the check was counterfeit and didn�t make it through the original bank. The seller then will have to repay the entire amount back to their bank, even though they have just sent thousands of it overseas, and have usually had enough time to have spent significant amounts of the rest of it.

Although local banks are now becoming aware of the scheme and are taking more precautions, the burden is still on the citizens to be cautious when they are participating in any kind of Internet based commerce. People need to remember that on the Internet things are often not what they seem to be, and criminals are exploiting the anonymity of it to gain an advantage over victims and over law enforcement.

Federal authorities have advised our agency that there is very little, if anything, that can be done once a victim has sent money to an unknown suspect in a foreign country, especially Nigeria. There is usually no way to ascertain the person�s true identity since foreign banks and governments are frequently unable or unwilling to assist in such investigations. Victims are still urged to report the incidents to local or federal law enforcement, in the event that the suspect is actually inside the United States and has somehow forged their identity to appear to be in a foreign country. If investigators can determine that the suspect is in the U.S., that suspect can potentially be tracked down and prosecuted.

There are many other Internet scams that are on-going. Another example is yet another variation of the Nigerian scheme in which people are contacted by a suspect who indicates that he represents the Nigerian or some other government, or large corporation. The suspect then relates that he has millions of dollars in a United States bank account that he needs �help� in retrieving money from. He will then try to entice the person into participating in some financial arrangement that will undoubtedly result in the victim losing money, and gaining nothing. Suspects often promise very large sums of cash in the form of �finder�s fees� in exchange for the victim�s participation.

People have to be cautious and stop and think, �why is this person contacting me?� and �does this sound too good to be true?� If you become suspicious of a financial deal, or if it sounds too good to be true it probably is. Walking away from a suspicious deal is the simplest way to protect yourself from financial fraud. Many people become victims of scams they were actually suspicious of by thinking: ��but look what I�d get if it�s true.�

Our agency has also had complaints from individuals who attempted to purchase items on-line at popular auction sites, such as E-bay. Investigators caution consumers to become familiar with the auction site before engaging in business on the site. Rushing to purchase items without checking things out will often lead to problems. E-bay does offer some protection for consumers, but you have to understand how it works to benefit from it.

E-bay will only assist by providing information if the item is actually purchased on E-bay. A common scheme is to list an item for purchase on the site, and then when a consumer contacts the seller to ask questions, the seller diverts the consumer to �another� item that the seller claims to be selling. Arrangements are then made to purchase the item outside of the auction site, making it impossible to obtain identifying information on the seller from E-bay in the event that the item is never delivered, or is grossly misrepresented.

Buyers should check the seller�s feedback rating, which is based on responses of people that have actually bought or sold items to the seller. The rating takes the form of a percent, with 100% being all positive feedback with nothing bad being said by anyone who has completed auctions with the seller. Buyers can read the actual statements left by other members about that seller. On recently completed auctions they can even click on the item number and view what the item actually was. Buyers should be aware that they should steer clear of sellers with feedback ratings that show no or very few responses or a large percentage of negative responses. It�s true that everyone starts with a zero rating, but do you really want to be the person to take the risk by sending money to a member t hat you know nothing about while hoping that they send you their merchandise?

It is uncommon for someone to join E-bay and sell something right away. Most people join and purchase items first, and eventually begin selling items themselves. Selling is more complicated than buying, and requires more experience. Therefore, someone who is selling something, especially something of significant value, should have more than one or two sales recorded in their feedback rating. If they don�t, it suggests that they might have changed their User ID, which could have been done to hide negative feedback left by people that were unhappy with previous sales.

When checking feedback a buyer should look at some of the individual transactions and pay attention to whether or not the seller has actually sold similar items in the past. It�s not necessarily a good idea to purchase a $5,000 item that you expect follow-up service on from a person with a 100% positive feedback rating, if that feedback was based on only a couple of Barbie-dolls or baseball cards that person had bought from someone else.

Before purchasing an item online the buyer should also check out the payment options, and watch for extra high shipping charges. Buyers should be wary of wire-transferring money, which leaves very little information to follow up on if things go bad. Normal online merchants accept credit cards or cashier�s checks, and sometimes provide extra protection for buyers through services like Pay-Pal. A cardinal rule on E-bay is to ask the seller any questions BEFORE bidding on the item. If you bid on it, and your bid wins, you bought it. You don�t get another chance to check things out or negotiate on shipping. Some items are too large to ship and must be picked up, and the buyer should make sure they are able to actually go through with picking the item up if it�s required.

Buyers should also watch other similar items and see what they actually sell for to see if the price they are thinking of paying is reasonable. Buyers should remember that just because an item is listed with a �Buy -It-Now� option at a certain price, doesn�t mean that anyone else will be willing to pay that amount for it. If you do business with anyone online, you should save all E-mail communications with the person, and you should try to get the person�s name, address and phone number before doing business with them.

Sheriff�s investigators have reported that it is now common to find very convincing counterfeit personal, business, payroll or even cashier�s checks. With the advent of greater printing and scanning capability at the lowest prices ever, it is now very easy for criminals to make very convincing counterfeits. Often the only way a merchant or individual can tell is by actually calling the issuing bank and checking the account. Even then, caution should be exercised, because our agency has had cases in the past where computer generated counterfeits had been generated and passed to local merchants using real account numbers and real names of businesses. In those cases a call to the bank might not have helped because the counterfeits weren�t discovered until the issuing bank actually looked at the checks and noticed that it didn�t look the same as the real checks, or that the signature was different than the account holder�s signature.

It is very important for merchants and individuals that are accepting checks to understand the risk they are taking. If a merchant or individual makes it very easy for a stranger to cash checks for large amounts, they are assuming a large risk of simply losing that cash. Clerks should be cautious and should simply refuse to cash checks they have become suspicious of. It would be better to take the chance of losing the business of a stranger you have never seen before than to loose several hundred dollars to a con-artist with a color ink-jet printer.