He waited and waited.

Finally, after his e-mails to the seller bounced back and Paypal, the payment intermediary, said the seller had closed her account, Pabon – who works for the Secret Service – realized he’d been had.

Internet auction fraud continues to top the list of consumer complaints to the Federal Trade Commission, with more than 98,000 complaints nationwide last year. That’s almost half of all Internet-related complaints filed with the FTC.

A spate of recent reports back up the FTC findings. One in every two Internet-related complaints filed with the National Consumers League last year was also about online auctions.

And the Internet Crime Complaint Center, an FBI-led partnership known as the IC3, said in its own recent report that 71 percent of its referred complaints last year concerned Internet auction fraud.

Maryland’s figures echo this trend. Last year, 1,731 consumers complained to the FTC about online auctions. That number has risen steadily the last few years, from 401 complaints in 2001, to 932 in 2002 and 1,423 in 2003.

Susan Grant, director of the National Consumer League’s National Fraud Information Center, isn’t surprised that popular marketplaces like online auctions attract a large number of complaints. Nor is it remarkable that the lion’s share are related to eBay transactions, she said.

“That makes sense because eBay by far has the largest market share,” Grant said. “Even though I’m sure that it’s only the minority of auction users that are having problems, it accounts for a significant number.” 

Ebay claims 100 million users worldwide.

Although the proportion of online-auction complaints has stayed fairly level to other Internet-related fraud in the last three years, the increase in real numbers shows a rise in the popularity of auction sites as well as in consumer awareness.

According to the FTC, most problems with online auctions occur when sellers misrepresent the true value of goods, withhold important information about the product or the terms of sale, deliver goods late, or as in Pabon’s case, don’t deliver them at all.

After online auction fraud, complaints about catalog sales and Internet services were the next top fraud categories in Maryland, according to the FTC report. Thirteen percent of all Marylanders’ complaints last year – 943 of them – were about catalog sales, and another 13 percent – 929 – about Internet services and computers.

Darschell Washington, 52, a secretary with the Baltimore Fire Department, filed a complaint with the attorney general’s office after she realized she was paying $29.80 on her phone bill each month for a dial-up account her underage daughter had installed without her permission.

Washington’s 15-year-old daughter, Marquita Julius, had installed an America Online promotional disk on their home computer so she could surf the Web without parental controls. After the disk’s free period lapsed, Julius stopped using the account. But AOL began billing their phone number.

Washington disagreed that AOL could enter into a contract with a minor and wanted AOL to refund the money she had inadvertently paid with her phone bill the last few months.

Washington’s complaint with the Maryland attorney general’s office was resolved after AOL agreed to refund the $278 in accumulated charges to her phone bill.

While Washington’s story ended happily, Pabon wasn’t so lucky.

He said he received no response from eBay after filing an online report with the site about the fraud.

No eBay representative was available for comment on Pabon’s case. According to its site, eBay provides buyer protection for purchases up to $200.

Pabon also filed a complaint with the IC3, then known as the Internet Fraud Complaint Center.

Consumers like Pabon can also file complaints with national agencies like the FTC and the National Consumers League, along with local agencies like the consumer protection division of their state attorney general’s office.

In fact, the IC3 encourages defrauded consumers to file complaints with multiple organizations, including the site itself, the consumer’s local and state police departments, the perpetrator’s town and state police departments, the shipper, the National Fraud Information Center and the Better Business Bureau.

Unfortunately, the consumer protection division of the Maryland Attorney General's Office cannot act on complaints about online auctions because it only mediates complaints between consumers and businesses, not transactions between private individuals, said Jamie St. Onge, director of the consumer education unit.  That’s why the office could help resolve Washington’s complaint, but could do nothing about Pabon’s complaint forwarded to them by the IC3.

Experts agree that fraud occurs when consumers forget to take preventative measures. Pabon said he made a stupid mistake when he failed to check the seller’s reputation ratings on eBay.

“It was sort of negligent on my part,” Pabon said. Had he checked sooner, he said, he would have been warned off by critical feedback by other buyers on the same seller.

But his son, Dominic, got a Gameboy for Christmas after all. Pabon went to a local Best Buy store and bought one for $79, a better deal than the one he thought he’d landed on eBay.

Although he hasn’t shopped online since, Pabon shrugs about his dual role as fraud victim and Secret Service investigator.

“I’m a consumer also,” he said. “It happens. I just never thought it happened to me.”

Copyright © 2005 University of Maryland Philip Merrill College of Journalism