Under federal regulations, sellers have 30 days or the time listed on the site to send items. Penalties can range from requiring sellers to refund buyers' money, to prohibiting the seller from doing business again, to jail time. A judge ordered the man to reimburse victims' money. Online auction fraud often occurs with computers and collectibles, Gardner says. For example, a buyer might purchase a rare Beanie Baby only to receive a common one.
Shill bidding is also on the rise and is often difficult for consumers to detect.
Using multiple user names, sellers not only place false bids but also positive comments about themselves to give consumers false reassurance, she says. Even sellers can be victims of fraud when they send merchandise to buyers before receiving a payment. Typically, however, sellers request a payment in advance. For its part, eBay is taking several steps to bolster users' trust. A 200-person fraud team works with users and law enforcement agencies.