Online auction sites are a popular way to buy and sell collectibles, jewelry, even cars; however, internet auction transactions are not always safe. Cashier’s check or “advance fee” fraud has become more prevalent as online auction sites and classified ads have gained popularity. In many cases, large ticket items lure this type of fraud artist to a victim.

The typical fraud scenario is somewhat confusing, which is probably one of the reasons why the fraud artist is successful.

This is an example of cashier’s check fraud: Say you post an ad for your car on an online auction website for $3,000. A foreign buyer bids on the car for the full asking price. When payment is arranged the buyer says that a broker in the United States will deliver the car to him for $2,000. He sends you a check for $6,000 and asks you to send $2,000 to his broker. You agree because he sent you an extra $1,000 for brokering the deal. You receive the cashier’s check, deposit it, and because cashiers’ checks are mistakenly thought to be as good as cash, wire the leftover sum to the broker. Ten days later your bank informs you that the cashier’s check was fraudulent and that you’re responsible for any money you’ve drawn against it. Unfortunately, you’ve lost your money and the merchandise to a scam. There are many variations of the scheme. A seller could just as easily attempt to scam you, and not all scammers are from outside the U.S.

Here are some suggestions to protect yourself from this type of fraud:

1. Use caution when dealing with foreign buyers and sellers.
2. Beware if the buyer or seller asks you to send money quickly. Banks often take 10 days or more to determine if a cashier’s check is counterfeit. Do not ship goods or spend any of the funds sent to you until 10 -14 days after you deposit the cashier’s check.
3. Have the bank verify the legitimacy of the check before depositing it.
4. These fraud artists tend to target vulnerable people, senior citizens and young adults. Alert any family members who may be at risk.
5. No legitimate company will offer to pay you by arranging to send you a check and asking you to wire some of the money back.
6. Be wary of those who try to lure you away from a legitimate website with promises of a better deal. If you are suspicious about a pending transaction, contact the auction site’s designated security officer.
7. Save all transactional information.
8. Never provide your social security number, driver’s license number, credit card number or bank account number.
9. Never agree to travel to meet your buyer or seller.

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