Auction Fraud

A very common scheme. Simply put, items are offered for sale and funds are collected, but the merchandise is never delivered.
This is one of the most commonly reported fraud schemes. Very simply, someone offers items for sale on one of the many online auction sites available (such as eBay or Yahoo! auctions), collects funds for the goods, and then never delivers the promised goods. Sometimes the fraudster will ship empty packages in order to delay discovery of the fraud. Sometimes "junk" will be shipped so that the fraudster can claim the fraud is really a misunderstanding. A $10 disposable camera will be substituted for a $400 digital camera, for example.
To protect yourself, try to deal with known, reputable sellers. Use a form of payment which allows rescission or has insurance. Credit cards offer valuable protections for both the purchaser and the seller. Use a known, reputable escrow service of your own choosing. Be wary of "second chance" solicitations protections for the buyer offered by the auction sites are lost when sales are arranged outside of the auction.
Be very cautious about sending wire transfers, money orders, cashier's checks, or making deposits directly into bank accounts. Once these types of payments are made, there is no recourse if the expected merchandise is never delivered.
Be wary of situations where a seller is selling merchandise out of character with previous sales. Auction frauds sometimes involve someone selling a series of low dollar items in order to establish a good rating on the auction site. They will then switch to selling high dollar items which they do not intend to deliver.