Safe trading on eBay

Want to buy or sell at online auctions but are worried about fraud and scams? Learn how to bag bargains and make a packet with our safe trading guide

If anything ever seemed too good to be true, it's eBay. The website is a place where people can buy things at a fraction of the price they are in the shops, and also make a heap of cash by selling off all the old junk that's cluttering up their home. So what's the catch?

For the majority of users, there isn't one. In fact, eBay usually works very well and is enjoyed by more than 203 million registered users around the world. But, as with almost any situation that involves money and profit, there exists a small minority who attempt to take advantage of the system and extract cash from innocent users by fraudulent means.

Don't let this fact put you off, though. There are lots of ways to protect yourself. Some safeguards are provided by UK law and others by eBay itself. Choosing the right method of payment can increase your protection further still. Of course, the strongest first line of protection is plain old common sense.

In this feature, we'll be showing you how to avoid being burned by online auction scams and explaining how to enjoy online trading with confidence.


First principles

The first thing to bear in mind when buying or selling on eBay is that the vast majority of users are decent, honest folk who are happy to play by the rules and provide each other with a smooth, hassle-free service.

The trouble is that most eBay transactions involve handing over payment before receiving the goods, so there's always an element of risk involved, particularly for buyers. eBay has a very good built-in way to help simultaneously reward and protect honest users: the feedback system.

Every time an eBay transaction is concluded, both parties involved are encouraged to leave each other feedback in the shape of a rating (positive, neutral or negative) and a short comment. Every eBayer's feedback history is available for others to see.

However, even someone with 99.6 per cent positive feedback could be harbouring more negative comments and disgruntled buyers than you might assume. If the person has been selling items in huge quantities, for instance, the percentage figure can be misleading. You should double-check the seller's full member profile history before you make a bid.


Revisionist history

Despite the feedback process, even the cleanest-looking eBay history cannot be trusted fully. You may recall a fraud gang from Lancashire which was caught conning people into handing over their eBay identities using faked emails. The email messages sent by the gang looked like they were from eBay and asked people to enter usernames and passwords.

These details allowed them to assume the guise of trustworthy sellers and appear as if they had a long, successful record of selling on the site. In reality, the scammers were using their stolen seller IDs to flog non-existent items and then walk away with the cash.

It's a classic phishing scam, and if there's a discernable moral to the story, it's that you should never enter any private details into emails, or any websites that are accessed by clicking a link in an email. eBay itself offers advice and protection against identity theft and email or website 'spoofing'.

Head to the site's Safety Centre ( and you'll find steps on how to create a good password and keep it safe, for example. Perhaps more usefully, it provides a free-to-download toolbar, which includes Account Guard - an automated security tool that presents a warning if you arrive on what may potentially be a fake version of the eBay website, and reports the site to eBay.


Fraud mystery

When we asked eBay about fraud, we were told that "eBay does not release numbers on the numbers of transactions that fall victim to fraud because it is very hard to be accurate about this area."

The company escapes revealing potentially off-putting information with this response. But it's safe to say, however, that fraud forms only a tiny fraction of the vast number of transactions that occur on the site.

If an item is damaged on arrival, significantly different to the description offered on eBay, or if it doesn't even turn up at all, it's more likely to be due to an accident or a misunderstanding rather than fraud. As such, situations like these can usually be sorted out by opening the channels of communication with the seller. eBay will provide you with the vendor's email address and, if necessary, phone number.

There are ways of minimising the possibilities of anything going wrong in the first place. Dan Wilson, community manager at believes that: " is a very safe place to trade, as long as customers follow the best-practice guidelines for its use - using the feedback mechanisms to understand who they are dealing with, reading areas such as the Safety Centre before they start using the site, using a safe online payment system."

The latter is key. Cash and cheques are obviously the worst ways to pay for items, security-wise. Most money transfers and direct payments via internet banking, too, offer virtually no safety net if things go wrong. Credit-card companies do offer protection on certain types of purchase but few individuals have the facility to process credit card payments. That pretty much leaves us with PayPal. Our payment friend?

Owned by the online auction house itself, PayPal remains the best way to pay for something won on eBay. It's a third-party service that deals specifically with the sending and receiving of funds and has a certain amount of security built into it. By acting as an agent between vendors and buyers, payment details are kept private, electronic and, theoretically, safe. PayPal also has a number of other features that help its security. Up to £500 worth of buyer-protection coverage is offered on 'qualified eBay purchases, for example.

Users who want to use the protection scheme should look for the PayPal Buyer Protection shield icon before placing a bid. Only sellers with spotless transaction histories can qualify for the Buyer Protection symbol.

Even if your vendor isn't covered by this scheme, the PayPal Resolution Centre will investigate any dispute you may have with a vendor, intercede on your behalf and attempt to resolve the issue.

That's not to say it always succeeds. "Be aware that PayPal protection does have its limits both in terms of cost and practicality in respect to the way the system works," advises Richard Webb, lead e-commerce officer for the Trading Standards Institute. "Users should read the terms and conditions carefully and understand what they mean."

Those terms and conditions are worth looking at; under some circumstances they change depending on the country in which the buyer and seller is based.

One thing to bear in mind is that using your credit card to pay for items via PayPal doesn't give you "double" protection. A representative of UK payments association APACS told us that by introducing a third party into the payment mechanism, you are effectively relieving the card issuer from responsibility for payment protection.


The contract

It is crucial to remember that when you buy or sell something on eBay, you are not actually entering into a contract with eBay itself, but rather with the person you are buying from or selling to. It's usually in your best interests to settle the matter between yourselves, but if you can't come to an agreement, you could try to get an independent mediator involved.

Square Trade, for example, offers professional mediation services specifically for online transactions and comes recommended by eBay.

The bad news is that, if things go really bad with an eBay transaction and you want to pursue the matter to the small claims court, you may not be covered by UK consumer law.

"eBay users should be aware of the fact that they're buying from a private consumer," says Mr Webb.

"So their rights are a lot less than when buying from a shop or a trader."

Technically this is true, but it largely depends on whether the vendor can be described as a "private seller" or a "private trader". A private seller is an individual who sells items on an occasional basis for fun and a small profit. But if, say, an Ebay vendor sells a substantial volume of items, has an eBay "shop" or online store and frequently sells multiple copies of the same item, they could qualify as a private trader under the law.

Switching to the seller's point of view, it's important to understand the implications of using eBay as a platform for business. Should a judge decree that you are a private trader and not just a casual eBay user, you might find yourself suddenly bound by much more complex consumer laws.

Before taking any legal action, you should take advice from the Consumer Direct website or from the Citizens Advice Bureau. Bear in mind that taking a matter to the small claims court may not be worth the time, effort or money required to see the thing through.


Well protected?

All of this raises the question of whether eBay is doing enough to protect its users. Naturally, eBay's Dan Wilson thinks so. "Education of our users is the long-term solution to fraud," he says.

"However, we make huge investments in our own anti-fraud technology and customer service and fraud teams. We also work extensively with a range of outside organisations."

Richard Webb believes that there are limits to what eBay itself can physically do. "Given the vast number of users and the volume of items being bought and sold on eBay, it's extremely difficult to police it completely," he says. Mr Webb also freely admits that the system isn't perfect.

"Things do go wrong occasionally. Don't take a risk you can't afford."

Despite this, it's worth reiterating that abuse, deceit and fraud barely register a blip on the eBay radar. With judicious use there is no reason to get anywhere near hot water. Perhaps the most sensible course of action would be to only buy using PayPal from users who display the Buyer Protection shield.

Read the details of any listing carefully and if you're ever in the slightest doubt about an item or its seller, don't make a bid.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.