E-auction is a market mechanism by which sellers place items for buyer to make bid o or buyer place RFPs for specific items and sellers place bid to win the jobs. E-auction is becoming important selling and buying channels for companies and individuals. Almost perfect market information is available to both buyers and sellers about prices, products, current supply and demand, and so on.
There are some of the prevention methods for e-auction frauds:
Escrow Services
An escrow service is a licensed and regulated company that collects, holds, and sends a buyer's money to a seller according to instructions agreed on by both the buyer and seller. Typically, once the buyer receives and approves the item from the seller within an agreed time frame, the escrow service then sends the payment to the seller.
Feedback Forum
It allows buyers and sellers to build up their online trading reputations. It provides user with ability to comment on their experiences with other.
Insurance Policy
Invest in insurance policy that offers by the auction websites. For example, eBay offers insurance underwritten by Lloyd’s of London at no cost to eBay users.
Appraisal services
Which use a variety of methods to appraise items. It includes expert assessment of authenticity and condition, and reviewing what comparable items have sold for in the marketplace in recent months.
Verification System
Which a way is of confirm the identity and evaluate the condition of an item. Third parties will evaluate and identify an item through a variety of means. For example, some collectors have their item “DNA tagged” for identification purpose. It provides a way of tracking an item if it charges ownership in future.
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