I've never taken part in an online auction, and to be honest, I had no idea how popular they are until recently. According to the National Consumers League (NCL), online auctions are wildly popular, and nearly one third of adults in the United States who go online have participated in them (which is about 35 million people).

It's not really a stretch to think that with than many people waving digital bid signs around that some opportunistic scammers might want to grab a piece of that action.

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The Online Auction May Seem Totally Legit, But There Are Red Flags To Look For

This is not to say that there aren't completely legitimate online auctions that you can safely take part in, because there most certainly are good and reputable online auction sites.

But, according to the Rockford BBB's Dennis Horton, the promise of a “good deal” is an excellent way to lure unsuspecting victims out of their money:

Even if an auction appears legitimate, potential bidders should be wary. Scammers may try to hustle you with “entry fees” or “pre-bid deposits” without even having any actual items in their auction.BBB Scam Tracker has received several reports of fake auctions phishing for consumers’ personal information and money.

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Here's One Of The Ways Online Auction Scams Work

Let's say you happen to find an online auction that offers things that appeal to you. It may be big ticket items like cars, trucks, motorhomes, boats, etc. The online auction site may even claim affiliation with the federal government. So, you sign up to become a bidder, which might include sending the auctioneer a copy of your driver’s license and other sensitive personal information.

Now that you're "registered," you place your bid on an item, and find out that you've won the bidding for an incredible price.

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Then, the auctioneer tells you how to pay for the item you've just outbid everyone else for. Once you've sent the money, your good friend the auctioneer pulls a Jimmy Hoffa and disappears making it impossible to contact them. You get absolutely nothing, and the scammer now has both your money and your personal information.

Click here to read about how to protect yourself from online auction scams.

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