#
Instances

% of to establish and run online auction ^Complaints ₂₀₀₅ stores. In 2006, online auction

fraud was the most reported online offense, comprising 44.9% of com-

5.43% 2.65%

plaints referred to the Internet Crime Complaint Center [ 5].

^{2.34% 2.31%} Online auction reputation systems contain feedback profiles _{1.51% 1.96%} made up of comments from transaction partners (buyers or sellers).

In order to understand the com- ^38.99% plaints being left in online auction reputation systems, it is necessary 6.51% 4.96% to determine what problems are currently being reported as nega-

^{3.62% 4.15%} tive feedback in reputation systems, and the proportion of

2.48% 2.19% problems that contain allegations
of fraud. This research develops a
typology of complaints about sell-
0.58%
ers in online auctions that can be
^57.79% used to classify negative feedback
posted at online auction sites.
^{Table 1. Complaints} Complaints placed in eBay’s repu-
^{about receiving items.} tation system in 2003 and 2005
were analyzed using the typology of
complaints. The types of fraud a buyer can encounter
when making a purchase at an online auction include
[ 6]:

% of
Complaints
2003

Item won but not paid: “I asked 4 times, Sellers never

No payment information give Name and Address, I can received from seller. not send Payment.” 380

Item won but not paid: “Seller after auction emailed

Seller has no product me to tell me that they did to sell not have them to sell.” 174

Item won but not paid: “Out of stock, 4 days later is

Seller reneges on auction selling again, got it low so and/or relists item he out of stock!” 116

Item paid but not “I'm still waiting for these received: sunglasses! 2-1/2 months Non-Delivery have gone by!” 2,716

Item sent: “Would never buy from again,

Late took a month to get item to
me, says server got hacked” 471

Item sent: “This is a seller that charges Overcharges for shipping outrageously for shipping!” 274

Item sent: “Item, a plate, was poorly

Poorly packaged packaged and arrived broken.

Seller not responsive” 182

Item sent: “Asked to ship to address Shipped to wrong in Hawaii, was shipped to address billing in California.”

Total for complaints about receiving items

36.19%

25

4,338

0.30%

58.39%

 

In 2007, an estimated $108.7 billion in goods were sold online with approximately a quarter of sales occurring at online auctions [ 2, 3, 10]. Online auctions provide unparalleled selection and potential value for buyers, while offering sellers a way to reach millions of buyers. However, the anonymity of online auctions gives less scrupulous sellers the opportunity to take advantage of buyers, either by intentionally misstating the quality and condition of their products or by selling products they have no intention of delivering. Both of these practices are forms of online fraud, and represent a growing problem for online consumers. Online auctions are especially prone to fraud because it is easy for businesses large and small

 

Complaints against Sellers

Figure 1. Typology of online auction com- _Problem plaints. Receiving Item

Problem with Item

Problem with Refund

Not Sent

Sent

Not
paid/refunded

Paid Lost Late Over- Poorly Shipped ^{No refund Partial Refund}
_{charge packaged to wrong} or refused refund received after
_{shipping address} refund received/ complaint filed
offered

No No Seller Non-
payment product reneges/ Delivery
info to sell relists item
received

Undamaged

Damaged

• Non-delivery. The seller places an item up for bid with no intention of delivering it.

• Misrepresentation. The seller deceives the buyer as to the true value of an item.

• Black-market goods. Illegal goods sold on online auction sites.

• Fee stacking. The seller adds hidden charges to
the item after the
auction is over.
• Triangulation.
^{Communication Bidding} _{Problem Problem} Stolen credit is used
to buy from an
online merchant
and the item is

^{Shill Bid} _{biddng cancelled} resold at auction.

• Shill bidding. Intentional fake bidding by sellers to drive up the price of their items.

Illegal Slow/no Sellerrude Confusion
Goods response leaves aboutterms
to email negative
feedback

Item Quality Wrong Missing Unexpected Defective Damaged Black Triangulation not as low item item/parts color/texture goods sent market described size/smell goods

Fee Terms not stacking understood by buyers

In addition to fraud, online auction buyers can experience prob-