E-Photo
Issue #12  3/1/2000
 
State & Feds 'Crack Down' On Internet Auction Fraud

State and Federal agencies recently announced what they called a crackdown against those who use the internet auctions to offer goods they don't have, or accept payments and don't deliver.

``We want Internet auction users and the online auction industry to know that the e-con artists who capitalize on them are going, going, gone,'' Jodie Bernstein, director of the Federal Trade Commission's Bureau of Consumer Protection says dramatically for effect. ``We don't intend to let a handful of rogues erode consumer confidence in Internet commerce or Internet auctions.''

Bernstein says complaints received by the FTC about Internet auctions have soared to nearly 11,000 in 1999 from 107 in 1997. Of course, millions of auction transactions take place each day.

The FTC, Department of Justice, U.S. Postal Inspection Service and other agencies say they have filed a mere three dozen law enforcement actions concerning internet auction fraud.

Of those cases, at least half a dozen involved the sale of the stuffed collectible Beanie Babies, which usually were paid for but never delivered, according to an FTC report.  

One fraud case was brought against one eBay vendor, who pleaded guilty on July 14, 1999, in Los Angeles to charges of cheating people who bid on various items on eBay, the world's largest online auction site.  He reportedly took about $37,000 from consumers without delivering a thing, and was sentenced in November to 14 months in federal prison.

So far no legal actions have been filed that I'm aware of against internet auction photography vendors, although I've heard a number of complaints--usually about antique dealers selling photos rather than full-fledged photo dealers themselves.

The new FTC initiative includes training for law enforcement officers, teaching them to track and prosecute Internet con artists.

This month eBay, with over four million items up for bid daily, began feeding the fraud complaints it receives from its users to the FTC, says Lisa Hone, an attorney with the consumer protection bureau.

Like other auction sites, eBay provides a forum for users to comment on their experiences and rate buyers and sellers.  While a useful tool, even good feedback about sellers should be viewed with caution, Hone says. 

``Unfortunately we've started to see examples of fake feedback, people giving themselves feedback, as well as sellers building a positive feedback rating and then going and ripping consumers off,'' she says.  

According to the FTC, some sellers also supply items different from those advertised or fail to deliver on time. Some consumers have bought collectibles like autographed sports memorabilia only to discover they've bought a fake, Hone says.

The FTC advises consumers who buy items through Internet auctions to:

1.) Identify the seller and check the seller's rating.

My advice: You should actually look over the feedback comments. Moreover, see if the vendor has any negatives posted and what exactly they were for.  A couple of negatives for an active dealer (over a hundred feedbacks) are typical.  For photography I'd also suggest to see if the vendor is either a member of the Daguerreian Society or AIPAD.  I've found a higher level of competence, honesty and willingness to take items back from members of these two groups.

2.) Be sure to understand what they're bidding on, its relative value, and all terms and conditions of the sale, including the seller's return policies and who pays for shipping. 

My advice: If you can't see an item clearly, don't usually bid on it.  Fellow dealer and Dag Society member Michael Lehr and I once joked--with a strained sense of black humor--about how he and I had wasted thousands of dollars on top quality scanners that show every nick, scratch or slight bend, while many of eBay's vendors rely on $59 scanners and cheap digital cameras to hide the flaws of their images.  Also beware of the overuse of Photoshop and other image editing software that clean up an image.  It's one thing to try to replicate the way the image looks by using the tools; it's another to try to use them to deceive.  I recently saw a dag that looked like more airbrush then actual image.

One common come-on is: "Fresh to the market.  Just took this dag out of an attic in Maine (or substitute your own favorite state)."  I've previously owned or handled a fair amount of the images that have had such "marketing" language attached to them.  There are even more misleading claims on line, of course.  Just look at some of the ones below.

I've seen many problems with misleading information about vintage, condition, type of image, attribution, and identification, but then I've seen all of this with the major auction houses too.

If the listing sounds "folksy" or naïve, it often is the exact opposite.  The dealer just wants you to think they don't know what they're doing. 

There have been too many counterfeit tintypes in particular on line.  Be aware that there are fake cowboys, Indians, nudes, etc.  Some are very well done.  Most of us in the trade have been seeing these for some time.  I remember a dealer showing me fake tins of Indians in 1984 that used original old plates.  They were very good indeed.  Look for half tone dots under high magnification (a Ferris wheel at the Columbian expo that came up on ebay was apparently such a copy, according to Mike Lehr), coatings that don't look "right" (color, peeling, surface), flatness of a copy (although there are many perfectly fine period copies), and publication of the image somewhere else.  If the image seems familiar, run, don't walk, away from this image.

Likewise, almost all of the identifications that I've seen in on-line auctions have been erroneous, and most of the dealers knew it.  One ebay vendor told me that if Christie's could call their dag a Lincoln, he could call his a Vice President.  That after I had proved to him that his image couldn't possibly be the person he claimed it to be.  The comment does remind us all that misidentifications also occur at other types of auctions as well.

Remember: It is always "Buyer Beware." 

Certainly email your questions on these areas to on-line dealers--and auction houses--and pay attention on how they respond, or don't.  I've gotten too many ambiguous responses and I feel the vendors were responding this way purposely to conceal problems.

Also pay for insurance on any item over $25.  It's worth it.

3.) Establish their top price and stick to it. 

Yeh, right.

4.) Evaluate their payment options. If possible, they should use a credit card because it offers the most protection if there's a problem. They can also use an escrow service that holds their money until the purchase arrives and is approved. 

My advice: If a dealer offers a credit card facility, he is probably more likely to be above board and you will not need to use it to protect yourself.  In my experience--for most dealers--an escrow service is unnecessary and very expensive.  Very legitimate dealers hate to use these facilities.  They're cumbersome and they tend to hold on to the dealer's money longer than they need to.   And frankly, there are more problems on the buyers' side with fraud than the sellers' side.  Know your dealers.  That's the best policy.  And don't deal with those vendors who won't offer you a reasonable return policy if the item isn't the way it's been described.  That doesn't mean, by the way, you should return an item just because "you don't like it."  And expect to pay postage/insurance both ways and auction fees on a return.  In another words, be serious about your bidding and don't abuse a good return policy.

5.) The Feds didn't warn about this next one, but it seems to be a recent phenomenon.  Be very careful about bidding in a "private" auction.  A private auction is one where the names of bidders are not revealed.  Recently I was emailed some disturbing news about one auction on eBay.  The emailer had complained to a vendor about the accuracy of its description.  The vendor ignored the emailer and changed the auction to private status, in order, so the emailer surmised, to avoid having any of its bidders notified of the problem.  By the way, eBay even says contacting bidders with the intent of interfering in an auction can get you booted off of their site.  While I'm sure their original intentions were good, the effect is chilling and further promotes dishonesty.  I hope they rewrite this rule.