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Take Action against Online Fraud

Lily O'Halloran


Learn how to take action against scam artists that participate in online fraudulent activities. As a small business owner, you must be vigilant at all times to protect your assets from criminals. Protecting your business is not enough to deter all scam artists; consequently it is necessary to report all fraudulent activity to the proper authorities. Small business owners must band together to keep online sales a viable business solution. By reporting criminals, you will be helping other small business owners just like you.


Protect Your Assets

When selling online through an auction site, you are presented with the ability to learn about your customer. It is important to know who you are dealing with in the event of fraud. Most auction sites have a feedback feature that enables you to learn about a customer’s previous transactions. Generally, auction sites also allow you to obtain the street address and phone number of the buyer. Always take a moment to jot this information down; you never know when you may need this information offline.

Be cautious of accepting bids from buyers located in foreign countries. The difference in legal systems can make it difficult to resolve any conflicts that arise, as does the physical distance. Read your seller’s coverage policies to determine what types of transaction fall under the guidelines of your coverage. Knowledge of your coverage can help you make decision regarding your own selling and shipping policies.

Don’t let payment problems weigh you down. Accept payment methods that are the least likely to be fraudulent: PayPal and other online payment solutions make transactions easy for both buyers and sellers alike. Escrow services are a safe solution for both parties and are generally used for big-ticket items. Be wary of accepting checks. Most buyers are not going to send you a fraudulent check, but there are those who will – better to err on the side of caution. Never accept cash as a means of payment. Cash does not leave a paper trail; therefore there is no way to prove the amount you received, or whether you received anything at all.

Delivery confirmation and insurance will help you save money in the long run. They prevent customers from claiming that their order was never received or that it was severely damaged. Forking out a little cash now is worth not having to deal with a huge hassle later. Contrary to popular belief, you are responsible for goods to arrive in the condition stated in the auction listing. This is why insurance coverage is vital for expensive products.

Keep records of all communication with buyers, including email, snail mail, invoice, receipts, and phone calls. A written summary of the phone call with the actual date and time is sufficient in most cases. If a dispute does arise, you will have the necessary information to provide authorities with proof of the scam.

Inform the auction site of any buyers that are abusing auction services. If you have a disagreement with a buyer that you cannot settle, allow a mediation service to help. Most auction sites have informative links to mediation services.


Report Scam Artists

Help put an end to a scammer’s illegal schemes by reporting the crime to the proper authorities and organizations.

  • The first step to take is to report the buyer to the auction site to make the auction service aware of the scam.


  • The next step is to inform the payment processor of the situation. You may be able to recover goods or funds.


  • Inform local or state law enforcement of the situation. They may be able to assist in busting the criminal and recovering funds or goods.


  • Contact the Attorney General’s office in your state. They will help shut down the scam and may help you prosecute the criminal.


  • File a complaint with the Internet Crime Complaint Center (IC3). The IC3 has a partnership with the FBI and other authorities committed to combating cybercrime.


Make a difference by doing your part to fight cyber crime. Report the crime to the proper authorities to aid in the fight and prevention of online fraud. Not only will you help yourself, you will also help other small business owners.



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