Things to take note to prevent e-auction fraud when a consumers participating in an e-auction

Auction is market mechanism by which buyers make bids and sellers place offers. It is characterized by the competitive and dynamic nature by which the final price is reached. Auctions can rapidly disposal of items that needs liquidation or a quick sale, they offer trading opportunities for both buyers and sellers that are not available in conventional channels and they ensure cautious execution of contracts.
Types of auctions are traditional auctions, electronic auctions, dynamic pricing, English auctions, Yankee auctions, Dutch auctions, free-fall auctions, sealed-bid first-price auction and sealed-bid second-price auction. The most popular type of auctions is an electronic auction (e-auctions) which means auctions conducted online.
The largest Internet auctioneer is eBay which has introduced several measures in an effort to reduce fraud. Following are action to prevent e-auction fraud:

1. User identity verification such in IC number, driver’s license number or date of birth. For example, verified eBay user, the voluntary program, encourages users to supply eBay with information for online verification.

2. Authentication service. It is to determine whether an item is genuine and described appropriately. It difficult to perform because their training and experience, experts can detect counterfeits based on subtle detail.

3. Grading services which is a way to determine the physical condition of an item, such as ‘poor quality’ or ‘mint condition’. Different item have different grading systems. For example, trading cards are graded from A1 to F1, while coins are graded from poor to perfect uncirculated.

4. Feedback forum. It allows buyers and sellers to build up their online trading reputations. It provides user with ability to comment on their experiences with other.

5. Insurance policy. For example, eBay offers insurance underwritten, users are covered up to $200, will with a $25 deductible. The program is provided at no cost to eBay user.

6. Escrow services. Both buyers and sellers in a deal are protected with an independent third party. Buyer mails the payment to escrow services which verifies the payment and alerts the seller when everything checks out. An example of a provider of online escrow services s i-Escrow.

7. Non-payment punishment. To protect sellers, a friendly warning for first-time nonpayment. A sterner warning is for second-time offense, with a 30 day suspension for a third offense and an indefinite suspension for a fourth offense.

8. Appraisal services which use a variety of methods to appraise items. It includes expert assessment of authenticity and condition, and reviewing what comparable items have sold for in the marketplace in recent months.

9. Item verification which is a way of confirm he identity and evaluate the condition of an item. Third parties will evaluate and identify an item through a variety of means. For example, some collectors have their item “DNA tagged” for identification purpose. It provides a way of tracking an item if it charges ownership in future.

10. Physical inspection. It can eliminate many problems especially for collectors’ item.

The application of pre-paid cash card for consumers

Nowadays, people can limit their spending with their prepaid cash card that load funds onto the card and use the money.Obopay, one of the prepaid cash cards that are similar as debit cards because both are using existing money rather than borrowing. However, personal identification number has to be keyed in for the transaction to be authorized if using prepaid cash cards. It is considered as most secure and safe financial transaction card because can it likes a portable access point to checking account. Nevertheless, it could not use for online shopping and in “quick pay” terminals that have a card reader but no keypad to enter a personal identification number.

Pre-paid Vista Cash Card is issued by Four Oaks Bank & Trust Company that given the opportunity for consumers with poor credit record and young children by not spending more than the balance on the card. Visa permits travelers access to money at automated teller machines in 65 countries and book the train

tickets by offering prepaid cash card such as Metro Card in New York City.

Touch ‘n Go (TnG) smart card is used by Malaysian for electronic payment system to toll expressway and highway. It is expanding its business to retail purchase by starting with fast food industry that enables consumers to buy dough nut, burger or fast-food from 21 outlets such as Burger King, 7-Eleven, Dunkin’ Donut. It is imitating the success of Hong Kong’s Octopus Card by setting 5 to 10% of the card holders for retail purchase as current target of the company.

Octopus Card was launched in Hong Kong on year 1997, September. It is a rechargeable contactless stored value smart card to transfer electronic payments in online in offline system. It is widely used in payment system for transportation, supermarkets, fast food restaurant, car parks and other pint of sale application such as service station s and vending machines that have achieved good outcomes.