Wednesday, January 11, 2006

Internet Rife with Fraud

(This appeared nationally on Market Wire, January 11, 2006)

Seventy percent of the visitors to Sherlock Investigations' web site use search terms that mention some form of Internet fraud. The majority come from people who have purchased something on eBay and never received the item.

"Most of the high-end brand merchandise such as purses, watches, and other jewelry sold on eBay is counterfeit," according to Skipp Porteous, president of Sherlock Investigations in New York City. "We get calls and email all the time from people who lost $150 or more on eBay auctions. All we can do is tell them that they're lucky they didn't lose any more than that." Investigating anonymous sellers takes a lot of time and effort, so a loss of only $150 is not worth the fee Sherlock Investigations charges.

One of the popular ways eBay fraud is perpetuated is that a seller might offer an item such as a Chanel watch, or a Louis Vuitton bag. No matter how hard one tries, it's impossible to place a winning bid on the item. That's because the seller is bidding against everyone else using an automatic sniping program to get the bid up to astronomical levels.

The next day, the seller contacts some of the losing bidders and concocts a story, such as the winning bidder backed out, or that they have an identical item available for sale. They'll even mention, "You know what the item went for yesterday, so make me a reasonable offer and I'll send it to you."

The rule here is never make a deal with the seller outside of eBay. With eBay, a credit card, or PayPal, you have some amount of protection. Another Porteous eBay rule is, "Never spend more than you can afford to lose."

Then there are people who are taken in by a professional-looking web site from some Wall Street investment firm. They usually know that they're taking a chance, so they'll just invest a couple of thousand dollars. In a month or two, the firm gives them back three thousand. Now, they take the big leap and invest $100,000. Of course, when they go to cash-in, the firm has disappeared.

Fortunately for their clients, Sherlock Investigations recovers thousands of dollars for victims of Internet fraud. "Sometimes we even bring in the FBI," Porteous says.

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