Tuesday, February 17, 2009

Things to take note to prevent e-auction fraud when a consumer participating in an e-auction

Auction is market mechanism by which buyers make bids and sellers place offers. It is characterized by the competitive and dynamic nature by which the final price is reached. Auctions can rapidly disposal of items that needs liquidation or a quick sale, they offer trading opportunities for both buyers and sellers that are not available in conventional channels and they ensure cautious execution of contracts. There are few types of auction that are traditional auction, electronic auction, dynamic pricing, English auction, Dutch auction, free-fall auction, sealed-bid first price auctionm, sealed-bid second price auction

The most popular is electronic auction that is e-auction which means conduct auctions online. The largest Internet auctioneer is eBay which has introduced several measures in an effort to reduce fraud.

User Identity Verification
For example, verified eBay user, the voluntary program, encourages users to supply eBay with information for online verification such as identity card number or date of birth.

Authentication Service
It is to determine whether an item is genuine and described appropriately. It difficult to perform because their training and experience, experts can detect counterfeits based on subtle detail.

Feedback Forum
It allows buyers and sellers to build up their online trading reputations. It provides user with ability to comment on their experiences with other.

Non-payment Punishments
It is to protect the sellers, a friendly warning for first-time nonpayment. A sterner warning is for second-time offense, with a 30 day suspension for a third offense and an indefinite suspension for a fourth offense.

Item Verification
It is a way of confirm he identity and evaluate the condition of an item. Third parties will evaluate and identify an item through a variety of means. For example, some collectors have their item “DNA tagged” for identification purpose. It provides a way of tracking an item if it charges ownership in future.