Buying “nothing” on eBay
by Daniel Frank Sedwick / Augi Garcia
The boom of Internet auctions has given rise to a common and dangerously successful scam in which the perpetrator uses ripped-off images and descriptions to sell material they don't actually have. It is very easy for these scammers to simply take the images and descriptions from other Internet stores or auction sites and then offer them again in fraudulent eBay auctions. These auctions are usually set at a ridiculously low opening price, which should raise a red flag; but some fast-learning scammers now offer “virtual coins” at more realistic prices (but without reserve) in order to look like the real deal.
What collectors should realize by now is that rare coins are usually sold by experts, and the chances that somebody out of the blue offers a rare piece on eBay without reserve are the same as buying a Ferrari California in a garage sale for $5000. Sophisticated scammers mostly know to avoid the very rare items now and instead use expensive but not ultra rare coins, meaning they look for something more common but popular. In other words, they do their homework to pull off ever better scams.
Once the scammer selects his coin, here is his modus operandi:
First the perpetrator seeks out an already hacked eBay account from a "farm." As you can imagine, eBay is full of old and inactive accounts whose owners gave up trying to remember their passwords and simply opened new accounts without closing the old ones. Even low-activity accounts are good for this purpose if not properly monitored by their owners, who have no idea their accounts have been hacked till they are eventually used for fraudulent sales.
Next, of course, the fraudulent seller needs a way to get paid. The preferred method is Western Union money order, which is impossible to track and is usually managed by grocery stores and other places that are too busy to care much about checking for fraud. But lately the scammers have found a sneakier way to get paid using what is known as a “PayPal bridge”: a chain of stolen PayPal accounts! Just as hackers steal and crack passwords for eBay accounts, so they do it for PayPal accounts. Once the "virtual coin" is sold, the scammer requests payment be made to the stolen PayPal account, and then, as soon as the funds are in, they are (usually automatically) transferred to another stolen PayPal account and so on until the trail becomes too long to follow. By the time the money reaches the last account in the chain (the real scammer), it is likely overseas and gets withdrawn to a foreign bank account--good luck trying to get the money back from Indonesia or China! Keep in mind that most likely the legitimate owner of the PayPal account to which you send your money has no clue he is being used, since the money gets moved to a different account in the chain before he can do anything about it, and so he will be as shocked as you are to learn about the fraud. PayPal also gives the option to use debit cards for their accounts, and so the last account in the chain could be waiting with debit card ready to go in a fast and furious shopping spree on the Internet! It all happens in the blink of an eye.
username and password by providing a dynamic code that changes and therefore cannot be hacked. There are two ways to use this feature:
1. For a one-time fee of $5 you can opt for a portable USB device the size of a credit card that you must plug into your computer when you log in to PayPal. This device creates a unique security code every time.
2. For free you can opt for a mobile phone security key, which will send a temporary security code by text message to your cell phone or PDA every time you want to log in to your PayPal account. Many banks use this feature to execute wire transfers online.
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Daniel Frank Sedwick, LLC
P.O. BOX 1964 | Winter Park, Florida 32790
Phone: 407.975.3325 | Fax: 407.975.3327
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