The boom of Internet
auctions has given rise to a common and dangerously successful scam in which
the perpetrator uses ripped-off images and descriptions to sell material
they don't actually have. It is very easy for these scammers to simply take
the images and descriptions from other Internet stores or auction sites and
then offer them again in fraudulent eBay auctions. These auctions are
usually set at a ridiculously low
opening price, which should raise a red flag; but some fast-
learning
scammers now offer “virtual coins” at more realistic prices (but without
reserve) in order to look like the real deal.
What collectors should
realize by now is that rare coins are usually sold by experts, and the chances
that somebody out of the blue offers a rare piece on eBay without reserve are
the same as buying a Ferrari California in a garage sale for $5000.
Sophisticated scammers mostly know to avoid the very rare items now and instead
use expensive but not ultra rare coins, meaning they look for something more
common but popular. In other words, they do their homework to pull off ever
better scams.
Once the scammer selects
his coin, here is his modus operandi:
First the perpetrator seeks
out an already hacked eBay account from a "farm." As you can imagine, eBay is
full of old and inactive accounts whose owners gave up trying to remember their
passwords and simply opened new accounts without closing the old ones. Even
low-activity accounts are good for this purpose if not properly monitored by
their owners, who have no idea their accounts have been hacked till they are
eventually used for fraudulent sales.
Next, of course, the
fraudulent seller needs a way to get paid. The
preferred method is Western Union money order, which is impossible to track and
is usually managed by grocery stores and other places that are too busy to care
much about checking for fraud. But lately the scammers have found a sneakier way
to get paid using what is known as a “PayPal bridge”: a chain
of stolen PayPal accounts! Just as hackers steal and crack passwords for eBay
accounts, so they do it for PayPal accounts. Once the "virtual coin" is sold,
the scammer requests payment be made to the stolen PayPal account, and then, as
soon as the funds are in, they are (usually automatically) transferred
to another stolen PayPal account and so on until the trail becomes too long to
follow. By the time the money reaches the last account in the chain (the real
scammer), it is likely overseas and gets withdrawn to a foreign bank
account--good luck trying to get the money back from Indonesia or China! Keep in
mind that most likely the legitimate owner of the PayPal account to which you
send your money has no clue he is being used, since the money gets moved to a
different account in the chain before he can do anything about it, and so he
will be as shocked as you are to learn about the fraud. PayPal also gives the
option to use debit cards for their accounts, and so the last account in the
chain could be waiting with debit card ready to go in a fast and furious
shopping spree on the Internet! It all happens in the blink of an eye.
The best defense is to check the seller's activity--not just feedback score, but
actually WHEN the feedback was submitted (as it may have been long ago). It is
also good to see what other items (if any) are currently being offered by the
seller. Better still, run a search for the auction title on Google to see if the
coin was recently posted on other sites. Basically just don't fall into the trap
by thinking that you found a pot of gold and are the only one seeing the
auction. "Too good to be true" definitely applies here--there are no GENUINE
1732 pillar dollars from China in Mint State for $200! We have even seen
scammers get so advanced that they intentionally misspell the key word of the
title in order to make it look like you found something unique by accident,
something that you do not want to tell anybody about until you win it for a
bargain price. Keep in mind that dealers like us are active buyers too and live
by selling and buying coins all the time and generally do not miss something
truly worthwhile. In the past we were able to warn potential victims, but now
eBay hides user names for the active bidders and the only way we can help at all
is when the victim contacts us afterward, by which time it is of course too
late.
Another good defense in terms of payment is the new (and oddly under-promoted)
PayPal Security Key feature. This provides an additional layer of security
beyond your
username and password by
providing a dynamic code that changes and therefore cannot be hacked. There are
two ways to use this feature:
1. For a one-time fee of $5
you can opt for a portable USB device the size of a credit card that you must
plug into your computer when you log in to PayPal. This device creates a unique
security code every time.
2. For free you can opt for
a mobile phone security key, which will send a temporary security code by text
message to your cell phone or PDA every time you want to log in to your PayPal
account. Many banks use this feature to execute wire transfers online.
If you do get scammed, do not panic... simply contact PayPal and eBay and
explain what happened. They are familiar with these scams by now but just don't
have the capability to monitor all accounts to see the scams in progress. If you
have already paid by PayPal, then you should get your money back, just as you
would in any case of non-delivery of goods--in other words, PayPal is the one
who is really being scammed. But if you paid by Western Union or (gasp) cash or
check, then you will have to chalk it up as a lesson learned. Next time pay a
little more attention and buy only from known and reputable dealers, real people
who are established either on eBay or any other website or physical place.
EBayers who do pay attention can also help by notifying eBay about fraudulent
auctions in progress. If you see an eBay auction offering a "virtual coin" that
appears elsewhere, simply click on Report Item below the seller information on
the right side. Instead of hoping for the "pot of gold," be diligent and save
the less-careful eBayer from buying "nothing." The only way to truly beat the
scammers is to make it more difficult for them. Once they see their art is no
longer easy, they will move on to something else.
also read: Reporting
Fake Coins on the Internet: eBay reporting guide
