Ask any user about eBay and, for every success story you hear, there'll also be one regarding fraud or payment scams. In fact, according to the FBI, which tracks online fraud via its Internet Crime Complaint Center, auction scams have averaged more than half of all online fraud complaints.
The good news is that fraud reports have gone down in the past couple of years, returning to 2003 levels. eBay is partly to thank for this, it has stepped up its fraud policing by introducing an antifraud toolbar for users, designed to identify attempts by phishers to obtain your eBay log-in information. Recently, eBay also partnered with Google to stamp out a major site-redirection vulnerability exploited by phishers.
Other tools in eBay's fraud-fighting arsenal include the eBay/PayPal Security Key, launched in February 2007, as well as several measures designed to safeguard member IDs and improve buyer protections introduced in April 2007. Also, to protect member ID information, which can be used to send phishing emails and fake "second-chance" offers, eBay now hides the IDs of bidders in big ticket auctions. An expanded new seller feedback system gives buyers the detailed information they need to decide on the seller's bona fides.
eBay has also recently implemented a number of changes designed to protect users. Among them is the removal of a seller's ability to leave negative feedback on buyers, eliminating the fear of retaliation that many buyers had when deciding whether to leave negative feedback of their own. This fear resulted in under-reporting of bad transactions through the feedback system.
Sellers in high-risk categories such as computers, or those who have less than stellar feedback, are now required to take payments either through PayPal or a credit card. In some cases, PayPal will even withhold payments to sellers entirely until the buyer has left positive feedback or 21 days have passed without a claim.
Even with all these safeguards, there are still risks to using eBay. Users put up with them because it's the biggest game in town, with 95 percent of all online auction listings, according to Jupiter Research. Total auction sales were about $30bn (£15bn) last year. Amazon's Marketplace is gaining in popularity, especially for hard-to-ship items and books, but for many broad product categories, such as antiques and collectibles, eBay is still the best or only viable outlet.
But it's not just down to eBay. Users also have a responsibility to make themselves more aware of fraud. So just what steps should you be taking to safeguard against eBay fraud and online scams?
NEXT PAGE: A breakdown of the three most popular types of eBay fraud.