ZDNet UK / News and Analysis / Infrastructure / Networking

Auction sites warn on the danger of wire transfers

By Troy Wolverton, CNET News, 4 July, 2002 14:18

Daily Newsletters

Sign up to ZDNet UK's daily newsletter.

Topics

Yahoo!, eBay, auction sites, ubid, warning on using file transfers

NEWS
Earlier this year, Shahir El-Shaieb lost $1,645 in an online auction, and he has little hope of getting the money back. That's because El-Shaieb paid for the Apple Macintosh G4 he found on eBay with a wire transfer. Unlike credit cards and cheques, wire transfers can't be cancelled after they've been sent. And that means they've been used in many fake auctions -- so many that several online auction sites are warning visitors of the dangers. "A significant portion of Internet fraud is committed through wire transfer payments. We urge you to arrange alternative payment with the seller," auction site uBid said in a note posted on its site and emailed to all winning bidders. "Money wired to any location (within the United States or overseas) is virtually impossible to reclaim. We highly recommend against wiring money to fulfill payment at auction close." UBid posted that note after seeing an upswing in bidders being defrauded by sellers who required them to pay with a wire transfer, company officials said on Wednesday. "We just believe that (using wire transfers) is not the way to do business," said Christian Feuer, uBid's chief executive officer. Feuer acknowledged that there are legitimate uses for wire transfers in online auctions, but he said that "because it is problematic to control (using wire transfers) we discourage it." Yahoo! stopped covering wire transfers with its fraud insurance last November and sends email notices to bidders warning about the use of them. "We understand that a lot of times they are a legitimate way to settle a transaction," said company spokeswoman Nancy Evars. EBay and Amazon.com representatives did not return calls seeking comment about their policies on the use of wire transfers. Fraud has been a persistent problem for online auction sites. Although most sites claim low rates of fraud, that still translates into hundreds of potentially fraudulent auctions each day. Most fraud still involves sellers offering items they have no intention of shipping, but the techniques they use to scam bidders have become increasingly sophisticated. This year, scam artists have broken into dozens of eBay accounts by using automated programs to guess the passwords. Once they have control of the accounts, the scam artists use the reputable seller's good reputation to make bids on goods they have no intention of shipping. Wire transfers, made through a bank or via a service provided by Western Union, are like electronic cash, and unlike credit cards or services such as PayPal, customers are not refunded in cases of fraud. Scam artists have been using several different variations on the wire transfer scam. Some have used it with accounts they've hijacked. Others have set up fake escrow services to make bidders feel more comfortable about sending a wire transfer. Auction sites need to do a better job to educate and protect bidders about the dangers of using wire transfers, said Rosalinda Baldwin, editor of The Auction Guild, an online newsletter. Other sites should follow uBid's lead and warn bidders about sellers who require they pay via transfers, she said. Sites should also make people click through a warning about wire transfers when they first register, she said. "It legitimises what they are doing when they make an effort to protect you," Baldwin said. "But (many sites) are not even making the effort." El-Shaieb, a technical writer in California, says he's learned his lesson. He said he wouldn't use a wire transfer service again to pay for another large online auction purchase. "It's a convenient way to transfer money, but it's also completely unprotected," El-Shaieb said.
E-commerce is transforming business around the globe. Get the latest headlines at ZDNet UK's E-commerce News Section. Have your say instantly, and see what others have said. Go to the ZDNet news forum. Let the editors know what you think in the Mailroom.

Related stories

Fraud still troubling eBay users

Hackers attack eBay accounts

Ofcom to make it easier to change broadband service

Google set to build backbone of its 1Gbps fibre network

Nicira reveals network virtualisation details

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

  • Login

Will not be displayed with your comment

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

Get ZDNet UK's daily newsletter

Enter your email address to sign up

ZDNet UK Live

JCB33

How dare film makers, artists or anybody that invests in creativity stop us pirating their works for free. I want to be able to walk into my local...

4 hours ago by JCB33 on ACTA stumbles in Germany
Moley

@GrueMaster. I prefer horses for courses rather than one size fits all. I, and I suspect most other computer users, do not really wish to have...

6 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint
greycynic

The product that scares me every time I have to use it is the Office 2007 version of Excel. The first bug that I found was applying the median...

6 hours ago by greycynic on Ten flawed products that derail productivity
GrueMaster

Nice review and very informative. One thing I'd like to add (in reply to whs001's 1st question), the main reason to have the same interface from...

8 hours ago by GrueMaster on A tale of two distros: Ubuntu and Linux Mint
Frederick Wrigley

I'be been using Mint 12 since the RC came out, and I am far more happy with the Cinnamon, the Mate, and, yes (with extensions), theGnome 3...

9 hours ago by Frederick Wrigley via Facebook on A tale of two distros: Ubuntu and Linux Mint
bdantas

Excellent article. One small correction, though--although a fresh installation of Linux Mint 12 will, indeed, provide the user with a version of...

9 hours ago by bdantas on A tale of two distros: Ubuntu and Linux Mint
Alan Ralph

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

10 hours ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material
Alan Ralph

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

10 hours ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material
Moley

For Gnome 2 die-hards, it is possible to add icons to the bottom panel (or top top panel, if you prefer) which provide the exact Gnome 2...

11 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint
ramwellian

Your comments would seem pretty naive and immature. Your 'solution' appears to be, "gee, let's all just give in to the hackers and give them...

11 hours ago by ramwellian on Cloud computing security: no more oxymoron?
BugStalker

"Interesting thought ... If you installed Win7 as a dual boot on a machine that previously only had Linux, and it wrecked your Linux installation,...

11 hours ago by BugStalker on Windows 7 Declares War on GRUB
whs001

This is an excellent summary of Ubuntu and Mint and the interface differences between them. Most such articles take a very partisan position for...

11 hours ago by whs001 on A tale of two distros: Ubuntu and Linux Mint
Moley

@ewallace. Not so clear. Anyone can obtain the text, for example from here http://www.ustr.gov/webfm_send/2379. I support ACTA so long as it and...

12 hours ago by Moley on ACTA: Facts, misconceptions and questions
45283

I think WinRT is fantastic. I just wish it was an option for people that didn't want to go through Microsoft's App Store with its attendant...

15 hours ago by 45283 on Why Windows 8 needs architectural hygiene for WOA
Burn-IT

Nine people? £30m? Who's back pocket is that lot going in? And IF they say it is for new buildings, what about all the ones the government has...

16 hours ago by Burn-IT on Police set to launch three £30m e-crime hubs
ewallace

Just to be clear, nobody knows what is in the text of ACTA, here is a photograph of the text of ACTA http://twitpic.com/8h9iju as submitted to the...

16 hours ago by ewallace on ACTA: Facts, misconceptions and questions
fgvrg56

Unfortunately main issue is that ASUS is refusing to accept that they make some mistake on this version of asus Transformer prime. 1 - GPS sensor...

17 hours ago by fgvrg56 on Asus Eee Pad Transformer Prime Wi-Fi & GPS problems?
Ben Woods

@Marcus A fair question. Just talked with Archos which said it was working on an announcement for next week....

18 hours ago by Ben Woods on Archos confirms G9 Ice Cream Sandwich update schedule
Marcus Karlsson

Any update on this, considering the claimed "first week of February"?

19 hours ago by Marcus Karlsson via Facebook on Archos confirms G9 Ice Cream Sandwich update schedule
apexwm

Bill Goodrich : Just as al_langevin pointed out, with Windows Server 2008 there is no Services for Macintosh anymore. It's gone, not available....

1 day ago by apexwm on Windows Server 2008 drops the ball for Mac compatibility

Latest in Networking

Ofcom to make it easier to change broadband service

Google set to build backbone of its 1Gbps fibre network

Nicira reveals network virtualisation details

Featured white papers

Six iPad tests for multimedia-grade Wi-Fi

Aruba Networks

Six iPad tests for multimedia-grade Wi-Fi

The University of Ottawa, Apple, Aruba Networks and others validate a multimedia grade Wi-Fi environment for scaling voice and video... Read more

Enterprise wireless networks add speed with 802.11n

Aruba Networks

Enterprise wireless networks add speed with 802.11n

This Aruba white paper explains the advanced technology introduced in the 'final' 802.11n certification, allowing enterprise network managers to understand its benefits and to plan their own upgrade... Read more

Solution Brief: Top 5 Reasons to Choose Blue Coat WAN Optimization

Blue Coat Systems

Solution Brief: Top 5 Reasons to Choose Blue Coat WAN Optimization

There's a pretty good chance your wide area network (WAN) looks like a mess right now. The rapid adoption of... Read more

Inside ZDNet UK

A tale of two distros: Ubuntu and Linux Mint

A tale of two distros: Ubuntu and Linux Mint

2012 Predictions: VCE FastPath, VI SAN Probe & Hadoop

2012 Predictions: VCE FastPath, VI SAN Probe & Hadoop

BlackBerry Bold 9790

BlackBerry Bold 9790

Case study: How cloud enables growth

Case study: How cloud enables growth

Ten factors that make Ubuntu 11.10 a hit

Ten factors that make Ubuntu 11.10 a hit

Toshiba Portégé Z830-10P Review

Toshiba Portégé Z830-10P Review

BT's archive: Pictures from the vault

BT's archive: Pictures from the vault