Reducing Internet Auction Fraud

November 1, 2011

Reducing Internet Auction Fraud

            When we are connected to internet, we are networked to the virtual world of so many people and chances are that, we may be vulnerable to internet fraud. The Financial Times in 2003 noted that online fraud was 20 times higher online than offline (Gavish, Bezalel). The complaints of online fraud registered at the IC3 Web site was 20,000 in 2000, in comparison to 200,000 in 2007, which is a huge increase in its rate (Gavish, Bezalel). We need to be prepared to face even more challenges in the near future as every business and everything we do, are going in to cloud with the boom of cloud computing.

            The article clearly makes a point that if we provide automatic insurance for the buyers and the seller, it generates more bidding activity as the two parties are more comfortable, involving in the bidding which might produce more instances of auction fraud (Gavish, Bezalel). Even though, seller can be the victim of fraud, the more likely party that suffers the most out of it is the buyer because the experience of the system as well as the process of auction is more likely to be greater with the seller than the buyer who visit the site just to buy the particular item that they are interested in (Gavish, Bezalel).

            To reduce the auction fraud, the auction houses should increase the information that is shared by the sellers as well as the buyers (Gavish, Bezalel). The total number of transaction and the positive responses out of the total is definitely one of the information of the seller that would be beneficial to reduce the auction fraud. Also, a separate statistics for selling and buying, for the member of the auction houses would be beneficial, because it would help the buyer not to misinterpret the positive score that may have been tricked on to attract buyers (Gavish, Bezalel). The auction houses should send a secret code in the physical address of the seller to validate the seller, so that, they would be able to discourage the fraud sellers (Gavish, Bezalel). The escrow services officially certified by the auction houses would definitely help reduce the fraud. Another great idea would be to charge the seller with the amount of money that he is selling online, because the buyer is already charged with the amount before they get the product (Gavish, Bezalel). Insurance companies should be certified by the auction houses, and a mandatory field for the sellers to do the transaction, would definitely help reduce the increasing proportions of the auction fraud (Gavish, Bezalel).

            Of all the points above, the most important one to reduce the auction fraud is the precaution that the buyer should be motivated to take doing the transaction. As a buyer, we can check with Better Business Bureau for the reputation of the company (Gavish, Bezalel). Try to get the products by going to an “eBay Xchange Point,” if it’s available. Always pay with your credit card not western union or any other forms of payment.

            I’m personally very much convinced with the article, “Reducing Internet Auction Fraud”. More information on the seller and buyer, separate statistics for selling and buying, charging the seller an amount equal to the sale, sensible insurance policy and most importantly the awareness to the buyers to protect themselves would definitely help reduce the internet auction fraud. But, I disagree with the authors point to institute regulatory control over the auction. The very beauty of the freedom that the buyer, seller and the auction houses have to perform the transaction without hassle would be endangered. I think people should be morally encouraged to do the right thing than to control them.  

Works Cited:

Gavish, Bezalel, and Christopher L. Tucci. "Reducing Internet Auction Fraud | May 2008." Communications of the ACM. Communications of the ACM. Web. 02 Nov. 2011. <http://cacm.acm.org/magazines/2008/5/5409-reducing-internet-auction-fraud/fulltext>.