The number one online scam involves auction scams. This is not surprising given that the buyer doesn't inspect the merchandise before he or she purchases it and pays for the merchandise before he or she receives it. Throw in the fact that the buyer doesn't ever see the seller and that the seller could be on a different continent, and you have the makings of the right conditions for a scam. To protect yourself against an auction scam, you need to know the different ways that you can get scammed. Below we survey the different types of online auction scams and how to protect yourself so that you won't become a statistic.

Shilling

This is a frequent scam that will sure raise your blood temperature as well as the final bid price. Shilling is the practice of the sellers and their partners bidding the price of an item higher so that the ultimate buyer ends up paying for the item at a higher price than he or she would otherwise have but for the actions of the partners. The scenario occurs as follows. The time to bid is drawing to an end and you have the highest bid. Suddenly, you notice that a large number of bids come in pushing up the price. You continue to bid on the item and in the end win. But where did all these bids come in when there was so little activity during the bidding process until the final moments. Answer: Shills

The seller either through the use of multiple user IDs or through his or her partners has driven the ultimate price higher so that you end up paying more than you otherwise would have. In some cases, the shills drive the price higher only to retract their bids at the last moment. Shilling is extremely frowned upon. If the seller is caught, then the seller will be automatically suspended indefinitely.

To detect a shill, check the bid history of the auction to ascertain who did the last minute bidding. Was it one person with several bids or a number of people? Check out the bid histories of the other auctions of the same seller. Was there a similar pattern? Determining whether you are a victim of a shill is difficult because many bidders like to come in at the end as a matter of strategy. If you feel that you were the victim of a shill, then report the seller immediately to the auction. Since it is difficult to prove, the seller might not be punished. However, you can complete a seller's auction rating appropriately to warn others and you can stay away from auctions of the particular seller and anyone who you feel conspired with the seller.