Susan Grant on online auction fraud

(CNN) -- Susan Grant, director of the National Consumers League's Internet Fraud Watch, joined the non-profit in 1996 to advise consumers on online offers and report suspected Internet fraud to law enforcement agencies in the United States and Canada. She is also vice president of public policy for the National Consumers League and oversees the National Fraud Information Center. What should consumers know before participating in online auctions? What level of protection do auction sites offer and is it enough? Watch Grant's appearance on CNNdotCOM September 30 at 12:30 p.m. and October 1 at 1:30 p.m.

Chat Moderator: Welcome to CNNdotCOM chat, Susan Grant.

Susan Grant: I'm happy to be here.

Chat Moderator: What kinds of fraud should consumers beware of when purchasing from online auctions?

Susan Grant: The most frequent complaints about online ordering are, "I paid my money, but never got what I paid for" or "What I got was not what I was promised."

Chat Moderator: Are some Internet sites worse than others?

Susan Grant: I think consumers need to be careful no matter what site they are visiting, especially online auction sites because they are not dealing with the site operator itself, but with the companies selling those things. In many cases, the seller may be a company or individual unfamiliar to you. And since you are paying in advance to receive something, there's no guarantee that the seller is honest. And there is the possibility that you might lose your money.

Question from Melanie: Do any "buying" sites offer different types of payment besides credit cards or checks?

Susan Grant: In most cases, consumers are paying for their online auction purchases directly to the seller, most frequently by check or money order. But if you can pay by credit card, that's the safest thing to do because of your legal rights to dispute the charges in cases of fraud or misrepresentation.

Question from was: The auctions promise lawsuits against those who don't deliver, but that's not always reliable.

Susan Grant: Most auction sites are limited in their response to fraudulent sellers to taking them off of their sites, and it's up to consumers, or law enforcement agencies representing the public, to take legal action against fraudulent sellers.

Question from ThangEatingLunch: Do you know if eBay has any type of protection for buyers? I had a problem one time with one seller with more than 200 positive feedbacks. Then I contacted eBay, (and) the answer I got back was basically, "Too bad for you, be more careful next time, check the seller's feedback, and contact the NFIC."

Susan Grant: The NFIC is operated by our organization to relay consumers' reports about Internet fraud to law enforcement agencies. eBay has taken some good steps to protect consumers. One is providing insurance up to $200. Another is arranging for individual sellers to be able to accept credit card payment, which in turn protects the buyers. But one problem with feedback forms is that the feedback can suddenly change and someone may have a positive feedback rating one minute, and then if all of the sudden there are problems reported, it can change that feedback to be negative.

Chat Moderator: What do you think about purchasing large, expensive items like automobiles on these auctions? Is that extremely risky?

Susan Grant: Since there is always an element of risk when you pay for something in advance, the risk is greater the more you pay. A good way to protect yourself is by paying by credit card or using an escrow service, which takes your payment and forwards it to the seller only when you confirm that you got what you were promised.

Question from was: How are people actually going to be able to change this, anyway?

Susan Grant: The problem with online auctions is the problem with the Internet, which is that you can't take everything you see at face value. You still need to check out companies you're not familiar with -- the same as you would if they were offering you something by telephone or at your door.

Chat Moderator: Are the on-site disclaimers adequate, in your opinion?

Susan Grant: I think that Web sites in general and online auction sites could do a better job of putting consumer protection information up front, so that people know more about how to protect themselves.

Chat Moderator: How does your organization work to fight this fraud?

Susan Grant: The National Consumers League cites Internet fraud in two ways: (1) We give consumers advice about how to identify fraudulent online offers, and how to protect themselves. (2) We transmit consumers' reports about Internet fraud to law enforcement agencies in the United States and Canada. And in the future, we hope to be able to transmit information about Internet fraud to agencies in other countries, if the sellers are located in those countries.

Chat Moderator: Do you have any final thoughts?

Susan Grant: Consumers need to look at online auction sites carefully to understand exactly how they work, what responsibility, if any, the online auction site takes for problems, and what precautions the buyers need to take to protect themselves. It's a great way of finding things you're interested in, and it's a great way for people to sell things. But not everybody is honest or reliable.

Chat Moderator: Thank you for joining us today, Susan Grant.

Susan Grant: Thank you very much. Consumers can reach our telemarketing and Internet fraud hotline through 1-800-876-7060. Or by going to www.fraud.org. Thank you.

Susan Grant joined the chat via telephone from Washington, D.C. CNN.com provided a typist for her. The above is an edited transcript of the chat, which took place on Thursday, September 28, 2000.

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