224 ◾ A Comprehensive Look at Fraud Identiﬁcation and Prevention
e more transactions the average person conducts through the Internet, the greater
their internal level of trust for the entire online shopping process.
Consumers conducting online purchases through well- known Internet shop-
ping websites can easily gain a level of conﬁdence in the system. When the online
shopper strays from the trusted and well- established online shopping venues, they
can become a victim of potential fraudulent activity. One of the main reasons for
deviating their online shopping attention away from the traditional retailers is the
cost factor. When making a purchase online through a traditional retailer, the con-
sumer is oﬀered to make a purchase of an item at a set price. In an eﬀort to purchase
the same item at a lower price, consumers look toward Internet auction websites.
11.2.1 Internet Auction Websites
◾ Internet auction websites create an opportunity for a person (seller) to list an
item they wish to sell.
◾ e seller creates a personal account with the Internet auction website.
◾ Sellers can list items they wish to sell on the Internet auction website.
◾ Sellers provide a picture of the item for sale, along with a description.
◾ Once the item for sale is listed, a starting bid price is generated along with a
time frame during which bids can be placed.
◾ Buyers place bids on items they wish to purchase. e buyer can make mul-
tiple bids on an item as the price increases through the bidding process.
◾ Once the bidding window closes, the person who made the highest price bid
is awarded the opportunity to complete the transaction.
◾ Based on the policies of the Internet auction website, the payment transaction
can be made directly to the seller or through the website. Fees for processing
and listing an item vary based on the Internet auction website.
In the cyberworld, a buyer can choose between numerous Internet auction web-
sites. Sellers also have a choice when it comes to selecting a venue to place their item
up for bid. Based on the overall integrity of the Internet auction website, the buyer
has to be aware of the potential for fraud.
Internet auction frauds are developed to cause the buyer a ﬁnancial hardship
through nondelivery, product deception, and bid rigging. e various methods of
Internet auction fraud are discussed next.
11.2.2 Nondelivery of Product
When wanting to purchase an item online through an Internet auction website, the
buyer has an option of many sites. Fortunately for the consumer, there are reputable
and well- known auction websites. Unfortunately, there are consumers who look
for the ultimate bargain and will work with sellers oﬀering the best deal on any
Internet auction website.