State, feds target online auction fraud.

Byline: From Register-Guard and news service reports

Federal and state fraud fighters are cracking down on Internet auction scams that fleeced thousands of consumers out of money and merchandise.

The Federal Trade Commission announced Wednesday it is joining law enforcement agencies in 33 states and localities, including Oregon, to hit auction con artists with 57 actions ranging from prosecutions to warning letters.

`Real world law enforcement will not let you get away with virtual fraud,' Howard Beales, chief of the FTC's Bureau of Consumer Protection, said at a news conference. He said the enforcement actions include 17 criminal cases.

Auction fraud was the No. 1 Internet-related complaint recorded by the FTC last year. More than 51,000 auction complaints were filed with the agency last year.

Fraud has been increasing with the popularity of online bidding on sites run by eBay, Amazon.com Inc. and Yahoo! Inc., where consumers can bid on everything from Beanie Babies to real estate. Buyers and sellers separately arrange for the transfer of items.

Many of the cases included in the FTC's `Operation Bidder Beware' involve scams where consumers win an online auction and pay but never receive any merchandise.

As part of the national crackdown, Oregon's attorney general office filed court actions Wednesday against two Willamette Valley businesses that sold electronics through Internet auctions, one in Eugene and one in Salem.

The attorney general's office reported that it had received at least 25 consumer complaints against Eugene businesswoman Brienne Wait for selling computers and other electronics through Internet auctions and failing to deliver any goods or provide refunds.

Under a civil agreement with the state, Wait agreed to make refunds within 180 days.

Oregon's consumer protection office has seen a spike in Internet auction complaints in the past two years, elevating Internet auctions from No. 6 to No. 4 on the ranking of top 10 consumer complaints, Oregon Attorney General Hardy Myers said.

Other scams shut down across the country were more complex.

Two business partners in the Chicago area allegedly added a twist by stealing identities to cover their tracks when they failed to deliver goods, ranging from toy cars to computer software, to winning bidders, the FTC said. James D. Thompson and Susan B. Germek created fake auction sites using names and personal information, including credit card account information stolen from people they disliked, from strangers listed on a hotel register and even from a dead man, the FTC claims.

`Consumers and law enforcers believed the identity theft victims were the ones who had bilked the consumers out of their money,' the FTC said. A federal court in Chicago ordered a halt to the scam and froze Thompson's and Germek's assets so they can be used to repay victims, the FTC said.

In another case, scam operators set up an online escrow service called Premier Escrow that was supposed to prevent fraud by holding auction payments until winning bidders could receive and inspect merchandise they had won, the FTC said. The scammers allegedly acted as both buyers and sellers and directed transactions to the fraudulent escrow service so they could steal consumer payments for items including computers and a car.

The FTC said a federal court in Virginia has ordered a halt to that scam, dismantled the scammers' Web site and frozen the defendants' assets pending trial.

Many of the scams occur on eBay because of the large volume of auctions there, said Eileen Harrington, the FTC's director of marketing practices. She said eBay has been very cooperative.

The FTC and the regional agencies are launching a campaign to educate people about Internet auction fraud. They offer these tips for consumers:

Save all transaction information.

Be familiar with an auction site's protections for buyers, and don't assume that all auction sites have the same rules.

Learn about a seller before bidding on an item, and avoid doing business with sellers who can't be identified or try to move a transaction off an auction site with promises of a better deal.

Investigate unfamiliar escrow or online payment services to make sure they are legitimate.

Never give out Social Security, driver's license, credit card or bank account numbers unless the seller and payment service has been verified.