PRESS RELEASE FOR IMMEDIATE RELEASE
Contact: Ralph Durstein, Deputy Attorney General
Phone: (302) 577-8510
Date: April 30, 2003
INTERNET AUCTION FRAUD TARGETED BY ATTORNEY GENERAL BRADY, FEDERAL TRADE COMMISSION, AND 28 STATE LAW ENFORCERS
Thousands of Consumers Fleeced by Auction Scams
(Wilmington, DE): Attorney General Jane Brady, the Federal Trade Commission, and 28 state Attorneys General today announced a law enforcement crackdown targeting Internet auction scams that bilked thousands of consumers out of their money and their merchandise.
The crackdown, Operation Bidder Beware, coordinated by the FTC in conjunction with the
National Association of Attorneys General (NAAG), resulted in the initiation of over 50 criminal and civil cases. Auction fraud is the single largest category of Internet related complaints in the FTC's Consumer Sentinel database, which logged more than 51,000 auction complaints in 2002.
Attorney General Brady said, "We are seeing more and more Internet auction fraud cases.
Buyers need to inform themselves and conduct their purchases very carefully."
Many of the cases involve straightforward scams where consumers "won" the bid, sent in
their money, but never got the product for which they paid. But defendants in one FTC case
combined auction fraud with serial identity theft in order to conceal their identities and lay the blame on innocent bystanders.
"I am very pleased with the strong initiative of the FTC on this issue. The scams we see
are across state lines and federal enforcement is an important component if we are to be successful in shutting down these criminals," said Brady.
In Delaware, the Attorney General's Office - Consumer Protection Unit filed suit in the
Court of Chancery on April 15, 2003 against Michelle Cohen and Vincent Napoli, doing business as "Instagifts". The Complaint alleges that the defendants failed to deliver merchandise advertised and sold through the Internet auction house, e-bay. The defendants, operating out of a New Castle County location, offered items such as digital cameras and computer printers at auction. They promised that the winning bidder would receive the merchandise within four weeks. Instead, consumers with "winning" bids received neither merchandise nor a refund of payment. The enforcement action alleges violations of the Consumer Fraud Act and the Deceptive Trade Practices Act, and seeks an injunction, civil penalties, and reimbursement of costs and fees incurred by the State in its investigation.
In addition, the FTC shut down 4 auction scams and U.S. District courts froze their assets,
pending trial. In addition, 29 state and local law enforcers have announced 56 law enforcement actions including lawsuits, cease and desist orders, consent agreements, assurances of voluntary compliance, warning letters, and criminal prosecutions. Participants in Operation Bidder Beware include the Attorneys General of Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Dakota, Tennessee, Washington, West Virginia and Wisconsin and members of California's Computer and Technology Crime High Tech Response team, including the San Diego District Attorney, San Diego City Attorney, Orange County District Attorney and Orange Police Department.
In addition to enforcement, the FTC, Attorneys General and other agencies are launching a
consumer education campaign to alert consumers about Internet auction fraud, and provide tips on how to avoid falling prey to it. Good information can be found in "Internet Auctions: A Guide for Buyers and Sellers," available at the FTC's Online Shopping Web site (www.ftc.gov/onlineshopping).
Some suggestions for online auction consumers include:
· Become familiar with the auction site. Find out what protections the auction site offers buyers. Don't assume one site's rules are the same as another's.
· Before bidding, find out all you can about the seller. Avoid doing business with sellers you can't identify. Be especially wary of sellers who try to lure you off the auction site with promises of a better deal.
· Protect your privacy. Never provide your Social Security number, driver's license number, credit card number, or bank account information until you have checked out the seller and the online payment or escrow service, if you're using one, to ensure legitimacy.
· Save all transaction information.
· If you have a problem you can't resolve with the seller, the best first step is to contact the site operator. If that doesn't work, file a complaint with the Attorney General's office at attorneygeneral.delaware.gov (800-220-5424) and the FTC at www.ftc.gov or call toll-free 1-877-FTC-HELP (1-877-382-4357).
Copies of the FTC complaints and a comprehensive case list are available from the FTC's
Web site at http://www.ftc.gov.
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