March 16, 2006, 12:00 AM

Online auctions top fraud complaints at consumer Internet watchdog group

Of consumer complaints filed with the National Consumers League in 2005, those involving online auctions accounted for 42%. The scope of the problem is underrepresented by the complaints filed, says NCL.

Paul Demery

Managing Editor, B2B E-commerce

 

Online auctions again were the most commonly reported source of Internet scams in annual statistics gathered by the watchdog group National Consumers League – but even so, the scope of the problem may be underrepresented in the complaints filed, the group estimates. Complaints over fraud involving the general online sale of merchandise ranked a close second for the year.

In figures released for 2005, goods sold at auction but never delivered or misrepresented accounted for 42% of all complaints about Internet scams reported to the Washington-based nonprofit organization. The average reported loss was $1,155. Complaints about goods never delivered or misrepresented that were sold online, but not via auction, accounted for 30% of all complaints filed, with the average loss in the category reported at $2,528.

So-called Nigerian money orders promising money to consumers who pay to transfer funds to their bank accounts accounted for 8% of reported scams, while fake checks accounted for 6%. Phishing, work-at-home plans, advance fee loans and other scams at less than 5% each collectively accounted for the balance of online fraud incidence reported.

The NCL notes that the total loss reported by those who filed complaints with the organization in 2005 -- $13.9 million – was significantly higher than the $5.8 million reported for 2004. While more complaints were received in 2005 than in 2004 – 12,315 compared with 10,794 – that doesn’t account for the more than doubling of the total loss, according to the group. The average reported loss across all reported complaints, $1,917, also was higher than the average loss of $895 reported in 2004.

The NCL notes that eBay removed a link from its web site to the NCL’s online fraud reporting site, Fraud.org, in 2003, with the result that complaints related to auctions reported to the group dropped to one-sixth their previous level. Based on web statistics, “NCL estimates that there would have been 30,720 auction complaints in 2005, representing 71% of complaints overall,” according to the group.

 

 

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