Online auctions top fraud complaints at consumer Internet watchdog group

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.

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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.