How To Avoid Getting Scammed When Selling Online

The sun is shining, the weather is warmer and you may be ready to tackle spring cleaning.  Before you toss those boxes of old toys, electronics, or furniture, you might consider selling them online. Online classified sites can be a fantastic way to unburden yourself of all your excess “stuff” but as with most web activity, there is the risk of getting scammed online.

In 2005, 22% of online adults had used online classified ads to sell something. By 2009, that number more than doubled to 49%. By 2016, the Craigslist site alone publishes 40 million new classified ads each month and is used by 50 millions Americans each year. That’s a lot of online selling!  With that much activity, scammers are looking for ways to profit and trick you out of your money with elaborate online selling scams.

man packaging box to mail out

So how can you protect yourself and your bank account from online selling scams? Here are the common warning signs to look out for and words of advice for identifying legitimate opportunities, straight from several online classified sites.

Recognizing Online Selling Scams

Craigslist identifies these red flags that should cause you to think twice about someone inquiring about your online ad:

  • Emails or texts from someone that is not local to your area (Craigslist recognizes that 99% of online selling scam can be avoided by dealing with local buyers.)
  • Vague initial inquiry, e.g. asking about “the item”
  • Poor grammar/spelling
  • Paying with Western Union, Money Gram, cashier check, money order, or escrow service
  • Inability or refusal to meet face-to-face to complete the transaction

Common Ways of Getting Scammed Online

PayPal highlights several of the more common ways that sellers are getting scammed online.

Paying Excess Money

Often time scammers will send you more than your asking price for the item. They will say it’s a mistake (they accidentally sent the wrong amount) or that the extra money should be paid to their “shipping agent” for delivery of the item. They will then ask you to return the excess money or pay their shipping company through a wire transfer.

This scam can hurt you in so many ways. The first part of the scam is that their payment is typically fake, either paid with a fake check or with a stolen credit card, bank account number or checking account. So not only do you receive no payment, you may also have to pay fees for depositing a false check. You’ve lost the money you wired to the scammer and you may have lost the items you’re selling as well.

Shipping Scams

In addition to asking you to wire the “shipping agent” fees from the excess money you are paid, shipping your item can open up more scam opportunities.

Perhaps a buyer stresses the urgency of receiving your item as quickly as possible, asking you to ship the items ASAP, before receiving payment. This is never a smart move, and you should always wait to confirm that payment has been received before shipping your item.

Additionally, a fraudulent buyer may ask you to ship your items using his/her FedEx or UPS shipping accounts, using the lie that they receive a better shipping rate. When you use someone else’s account, you lose control of the process. The buyer can now contact the shipping service and ask for the package to be rerouted to another address. The scheming buyer can claim the package never arrived at the original address, file a report with the online classified site, and you may end of having to pay them the money back.

Fake PayPal Accounts

You may encounter a buyer who insists that he/she can only pay through PayPal and encourages that you to set up an account to receive payment. The scammer may offer to send you a link to set up an account. However, that link takes you to a “fake” PayPal account where the scammer records and collects the financial information you submit.

If you want to set up a PayPal account to receive payment, be sure to go directly to the site yourself and never click on any links sent to you by an unknown person.

Selling online is a great way to make a little extra cash while decluttering your space, but only if you’re dealing with legitimate and honest buyers.  The old saying goes, “if it seems too good to be true, it probably is.”

Liz Oliver
Liz Oliver

Liz Oliver is the Member & Loan Services Officer at Lancaster Red Rose Credit Union. She’s been a member of the LRRCU team since 2007.