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Defining internet auction fraud

The Internet offers you a wealth of opportunities to extend commercial endeavors far beyond New York City. Whereas in the past, if you had something to sell, you would typically only advertise the sale locally, you can now reach a national (or even international) purchasing audience. The exposure the Web offers also allows you to generate significant interest in what you have to sell, even to the point of creating a potential bidding war. Yet as many of those that we here at Sapone & Petrillo, LLP can attest to, overseeing an online auction should be done with caution. 

Internet auction fraud has quickly become one of the more commonly recognized fraud schemes. The Federal Bureau of Investigation defines "internet auction fraud" as either the misrepresentation of goods for sale or non-delivery of goods purchased through an internet auction site. You might think that you are not subject to scrutiny when placing items up for bid online (especially if you advertise them "as is"), yet that is not always the case. You must still operate in good faith when arranging any type of online transaction. Examples of actions that could lead to accusations of internet auction fraud include: 

  • Promising the sale of the same item to multiple parties
  • Favoring a single bidder in an auction-style scenario
  • Failing to deliver items purchased through an online auction

The question of whether any accusations of fraud made against you are valid typically boil down to your intent. Problems with the processing of payments or delivery of goods outside of your control are not proof of fraudulent intent. Typically, observing the standards of the website you are selling your items through will be enough to overcome any allegations made against you. 

More information on defending yourself against fraud charges can be found throughout our site. 

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