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How it works
An auction scammer sells legitimate products and sets up one or a few eBay accounts. A product is purchased on eBay and the money is deposited in the scammer’s PayPal account. Then the scammer uses the eBay order information to buy the product from another online seller and ship it to the buyer who ordered the item from the scammer. Finally, the scammer takes the money.
Funnily enough, since the action winner gets what they bid on, they never question the company that sent them the item. Also, to the retailer, the order looks pretty standard. This is the sneaky part of this scam and fraudulent transactions before the items are shipped may not be detected.
This is not a new scam, but it’s becoming more widespread, automated and more sophisticated. It doesn’t happen on eBay only either. To help alleviate the problem, merchants should understand their buyers and implement correct credit card authorisation protocols.
If you buy from other online sellers, remember to pay attention to your bank statements and report anything suspicious!