For Immediate Release
	March 25, 2003
	Contact: Carol McKay
	202-835-3323
	media@nclnet.org

Online Auctions Dominant Consumer Fraud

NCL’s Internet Fraud Watch Sees Record Number of Internet Fraud Complaints in 2002  

WASHINGTON , DC — Consumers made a record number of complaints about online scams to the National Consumers League’s Internet Fraud Watch last year, with complaints about online auctions rising dramatically. The amount of money lost topped $14 million, with more than $13 million in losses in the online auction category alone. “Clearly, consumers need to learn how to protect themselves from crooks on the ‘Net,” said IFW Director Susan Grant.

The IFW received 36,802 complaints in 2002, more than double the 15,864 filed in 2001. Online auctions ranked #1 at 90 percent of the complaints, compared to 70 percent in 2001. The other complaints in the top five were: general merchandise sales (5 percent); Nigerian money offers (4 percent); computer equipment and software (.5 percent); and Internet access services (.4 percent).

Grant offers this advice for online auction bidders:

·        Check the seller’s feedback rating if that information is available on the auction site. While a positive rating is no guarantee that you won’t have a problem, a negative rating is a danger sign.

·        Look for information about insurance and understand the terms. Some auction sites offer insurance protection, but coverage is limited to set amounts, there is usually a deductible, and there may be exclusions; for example, you may not be able to make a claim if you purchased something from a seller whose feedback rating was negative at the time of sale.

·        Pay the safest way. If you pay the seller directly with a credit card, you can dispute the charges if the item never arrives or was misrepresented. You don’t have that right if you use a third-party online payment service, even if you use your credit card to put the money into your account with the service. However, your credit card issuer may still be willing to help you.

·        Use an escrow service for purchases that aren’t covered by insurance or your credit card dispute rights. The difference between an escrow service and other online payment services is that the escrow service doesn’t pay the seller until you confirm that you got what you were promised.

Beware of fraudulent escrow services, though. “Con artists are now pretending to be escrow services and pocketing money from consumers who thought that they were protecting themselves,” said Grant. NCL has new tips at www.fraud.org on choosing and using escrow services. “It’s especially important for consumers to make sure they’re dealing with a service that is licensed and bonded,” said Grant. More information about the IFW’s 2002 statistics is also available on the Web site.

Consumers can report suspected Internet fraud by using the online form on at www.fraud.org or calling toll-free, 800-876-7060. That information is transmitted to local, state, and federal law enforcement agencies.

The National Consumers League, founded in 1899, is America 's pioneer consumer organization. Our mission is to identify, protect, represent, and advance the economic and social interests of consumers and workers. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.

NCL runs the National Fraud Information Center, which was created in 1992, and the Internet Fraud Watch, which was created in 1996, operating in tandem with the NFIC. Consumers from across the United States and Canada can call 800-876-7060 or fill out the online form to file a complaint. NCL staff provides advice and tips on how to spot possible telemarketing or Internet fraud and how to report it. Fraud reports from consumers are sent within minutes to over 200 appropriate law enforcement agencies, including the Federal Trade Commission and state attorneys general. For more information visit www.fraud.org,

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