As reported by Fraud, Phishing and Financial Misdeeds, auction fraud continues to be a huge problem.
The FBI has released its 2006 Internet Crime Report, and 45% of the Internet crime complaints in 2006 were for auction fraud. You can read the Internet Crime Report here.
I have to be quite honest. I am pretty disappointed in our Internet industry. I believe there are too many folks willing to ignore this issue in the interest of making millions of dollars in profits. Consumers continue to bear the brunt of the industry neglect, and in my humble opinion, the thinking is too short-term. If these problems continue to get worse, it could permanently damage and alter the ecommerce landscape.
The problem is that the big winners in a "scary" Internet are the huge brand names that already dominate the Internet industry (you know all the names). Unfortunately, the big guys know this, and so they view this problem as something that gives them a long-term competitive advantage over the emerging Internet businesses. Therefore, the small and medium merchants are the ones that will ultimately pay the price of an "untrusted" Internet. We have to find a way to make it safer for consumers, and at the same time, create better economics for the small and medium merchants that choose to sell online. If you are reading this blog post, please become interested in this issue. If you are merchant, your future business viability may depend on it.