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Buying and selling goods via online auctions can be an excellent way to find great deals and make some extra money. But if you're not careful, you could accidentally expose your name, address and other information to the wrong person, who may use them to commit fraud.
While it's not necessary to avoid online auction websites entirely, there are some steps you can take to safeguard your information and limit your exposure to identity thieves.
The Risks of Online Auction Sites
There are several risks to be aware of when you use an online auction website. Because you're often dealing with an individual rather than a merchant with a sophisticated process, some of these things can happen by mistake. But in other cases, it may be an intentional scam.
Whether you're buying or selling, here are some potential issues you may encounter:
- Identity theft
- Lack of payment
- Lack of delivery of goods
- Goods are damaged or inoperable
- Wrong goods are delivered
- Incorrect delivery address
- Goods are in worse condition than advertised
- Items you sell may contain important personal information or paperwork
Because of these risks, it's important to work only with legitimate auction websites. Some may provide safeguards to protect both buyers and sellers from scams.
How to Prevent Your Personal Information From Being Exposed
Getting scammed on a single purchase can be a frustrating and costly experience. But if someone manages to steal your personal information and use it to commit fraud, it could wreak havoc on your life for a long time.
Here are some steps you can take to protect your personal information, both as a buyer and as a seller.
- Try to find reputable sellers. When using auction sites, you can generally view some basic information about the seller in their profile. For example, you can see how many ratings they've received from other buyers and how satisfied other customers have been. Avoid buying from new sellers who don't have a track record of satisfactory service and from sellers who have a lot of negative reviews.
- Provide only the necessary information. You may not be able to get around sharing your name and address for delivery purposes, but avoid providing more details than that to the seller.
- Avoid unusual payment methods. Auction websites are usually set up to securely handle payments for goods, so there's no reason to provide any payment information to the seller directly. If they ask for your bank, debit or credit card details or request that you send gift cards or a money order, it's likely a scam. If you encounter this, report the user to the auction site.
- Ship from a location other than your home. Whether you sell goods on auction websites as a side hustle or you're just trying to get rid of a thing or two, avoid using your own address on the packing label, if possible.
- Watch out for buyer ratings. Auctions sites often provide ratings for both buyers and sellers. If you have the choice between a buyer with a great rating and one with no rating, choose the buyer with the better rating. If a buyer has poor reviews from other sellers, it may not be worth it, even if they're the only one interested in your goods.
- Create a generic auction website profile. Make sure there's nothing in your seller profile, including your username, that could identify you. Just stick to the basic information you need to set up the profile.
- Make sure the goods you're selling don't contain any personal information. When selling electronics such as old phones, laptop computers or tablets, make sure the device's onboard storage has been wiped. On many devices, you can easily initiate a factory reset to wipe out saved passwords, credit card numbers and anything else stored on the device.
Alternatives to Auction Sites
If you want to avoid the potential risks that come with auction websites, or you simply want some alternatives to compare, here are some to consider:
- Buy or sell directly with established retailers. Many online retailers offer discounted prices on used and refurbished goods.
- Use consignment shops to buy or sell goods. Consignment is an arrangement where a third party is authorized to hold and sell goods on behalf of the seller. In exchange, the consignor generally receives a percentage of the sales price. This extra layer can be a good option for both buyers and sellers to keep their information private.
- Visit a pawn shop. If you're looking to buy or sell goods quickly, a pawn shop can be worth considering. You'll generally get lower prices this way because the owner plans to resell the item and turn a profit. But you generally don't need to share personal information to complete the transaction.
Monitor Your Credit to Spot Identity Theft
Although there are steps you can take to protect your personal information, there's no surefire way to eliminate the risk of identity theft altogether. As a result, it's important to monitor your credit regularly to spot and address potential issues as they arise.
With Experian's free credit monitoring tool, for instance, you'll get access to your Experian credit report and your FICO® Score☉ powered by Experian data. Additionally, you'll get real-time alerts when changes are made to your credit report, such as new personal information, new credit inquiries and new accounts.
If you receive an alert about potential fraud, you can address the issue and take further steps to protect your credit reports and other personal information.