E-auction is type of business model which the auctions conducted online through internet. There are dynamic pricing changes due to demand and supply relationship at any given time. Actually E-auction is one of the best strategies to test the price of a new product. Although E-auction is convenience, but there is still some fraud occur in E-auction.
Type of E-auction fraud:
- - Bid- shielding: There are fake bidders bid at very high prices and then pull out at the last minute.
- Shilling: Placing fake bids on auction items to jack up the bidding price.
- Fake photos and misleading description.
- Improper grading techniques.
- Selling reproductions
- Failure to pay.
- Inflated shipping and handling cost
- Failure to ship merchandise.
- Loss and damage claims.
- Switch and return.
The method to prevent E-auction fraud
i) User verification: The E-auction website should request bidders to verify their personal id before bidding.
ii) Authentication service: A component of Windows Server operating systems that provides centralized user authentication and authorization, auditing and accounting.
iii) Grading service
iv) Feedback Forum: Set up a forum for all buyers and sellers, all the information or history of any sellers could be acquired through the forum.
v) Insurance policy: The transaction is protected under the insurance of websites or sellers.
vi) Escrow service: The middleman as in transaction between buyer and seller. Escrow service hold the payment or item from one party A until that party has received items from party B. Once the party A receives the item, escrow service just sends the payment or items to party B.
vii) Nonpayment punishment: The punishment to those who escape for paying.
viii) Appraisal services: To better understanding the profile of sellers and buyers.
ix) Physical inspection: Monitoring by the users themselves.
x) Verification: Final verification for the deal.
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