Auction Identity Theft

    March 16, 2004

Con artists who wish to use online auction houses (usually targeting eBay because it is the largest) to bilk unsuspecting users for thousands of dollars usually follow a fairly straight-forward scheme. It generally preys on the unsuspecting or less savvy, aiming at their ignorance of technology and security to steal their money.

The best defense against these crooks is to not be ignorant. Two simple rules will protect you from most of their schemes without fail:

1) Never give out your account information (be it PayPal, eBay, Yahoo!, or any other) over the phone or through a link in an email. ALWAYS log into the site directly (e.g. Type “” into your browser) rather than through a link in an email or from another website.

2) Never give out your credit card number to anyone who is not trustworthy: be they a business, a person, a website, or whatever. Make sure that websites you deal with when giving out personal information are using security certificates (the little lock appears on your browser to show that you are “locked” into a secure site) and that you know who they are and why they need your information.

Both of those rules translate to “ALWAYS BE SKEPTICAL.”

The con that these criminals follow is easy to understand and also easy to perpetrate if you have the wish to do it. Luckily, it’s also fairly easy for police to catch you once they are on your trail as hiding your movements is not always easy. Especially if you run “both ends” of the scam (both buying and selling).

The first thing these criminals will do is get a credit card number. The means of doing so are many and have been around in one form or another since the use of credit cards began. Once a number is had, the rest is easy.

Using the stolen credit card, the criminal then registers a domain name such as “” with the card and perhaps also purchases hosting (if needed) to put up a website. This can be done at any number of automated hosting companies that host for a monthly fee.

Now that the site is begun, a simple website – one that usually steals its design from the actual site being copied (in this case eBay) – is put up to gather information. A free email address at Hotmail or similar is set up as well. A simple web form and an explanation as to why the personal information is needed to “update the user’s account” (such as passwords, usernames, email addresses, credit card numbers, etc.) is created.

Then an email list is compiled using any number of programs for doing so or the list is purchased from a list broker (someone who compiles lists for email marketing). The list is then emailed using any kind of SPAM software to “safely” send it without being traced.

The emails simply instruct the recipient that his or her account at the service (in this case eBay) is in need of an update and that they should follow the link given and fill out the form to be found there. The form’s information is automatically emailed to the criminal’s free address ( for instance). The criminal now has only to enter the email and retrieve the information.

Now the real scam begins. By gathering this information, the criminal can now log into the accounts of those who fell for his scam and begin selling bogus goods using the stolen identity. A false PayPal account, an anonymous PO box, etc. are all that is needed to receive the ill-gotten gains.

A scammer can usually pull off several short-duration (and generally high-dollar) auctions under many different identities before being completely shut down and losing this stream of income. By then, thousands in stolen money and, worse, thousands more in illegally purchased goods from the auction site can be made.

The good news is that, in general, these people are usually caught by authorities fairly quickly because of the various security measures already in place: the IP address of the crook is not always hidden, a physical box to receive mail must be had or bank account must be opened to receive money, etc. Since these can’t be forged easily (the cost would be prohibitive for the expected return), they are almost always the links that catch the crook.

So remember: BE SKEPTICAL and you will not be a victim of these online scams and your good name online, that you’ve worked hard to maintain for your business, will not be ruined.

In closing, The Online Auction Academy would like you to know that the information given here is for informational purposes only in order to arm you against those criminals who would steal your good name for their own gain. Any use of this information outside of this purpose is solely the responsibility of the wrongdoer and is in no way endorsed or condoned by the Online Auction Academy. In the end, it is easier to make money legitimately than it is to steal. Stay safe!

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