Online Auctions named the #1 Internet Fraud...

WASHINGTON, DC...  Internet fraud reports are on the rise. According to Internet Fraud Watch, operated by the National Consumers League, complaints have increased 600 percent since 1997. Online auction complaints were the number one fraud complaint in 1998.  Auctions were first in 1997 with 26 percent of the total frauds reported, but increased to an alarming 68 percent in 1998.

"More people are online, and more people are getting scammed," said Susan Grant, Director of the Internet Fraud Watch. "Consumers need to remember that con artists are everywhere -- even in cyberspace."

The majority of fraudulent payments -- a whopping 93 percent -- were made "offline" by check or money order sent to the company. "Requesting cash is a clear sign of fraud," says Grant. "Pay the safest way. If possible, pay by credit card because you can dispute the charges if there is a problem."

Since many online auction sales are made by individuals who are not equipped to take credit card payments, IFW recommends that buyers use escrow services. They take payment from the buyers and only pass the money along to the sellers after verification that the goods or services were satisfactory. Some auction companies have programs to insure transactions. There are usually small fees for these services, which might be paid by the buyer or seller. According to Grant, "With consumers spending several hundred, even thousands of dollars on auction items, the extra expense may be worth it."

While fraud reports are on the rise, so is traffic on the auction sites. "Many people who participate in online auctions have good experiences, but the increase in complaints points to the need for more consumer protection and increased education," according to Grant. IFW has been working with eBay.com and other auction companies to improve safety and stop fraud.

Rounding out the top ten scams are, in order:

#1 -- Auctions
#2 -- General Merchandise Sales
#3 -- Computer Equipment and Software
#4 -- Internet Services
#5 -- Work-at-Home Programs
#6 -- Business Opportunities and Franchises
#7 -- Multilevel Marketing and Pyramid Schemes
#8 -- Credit Card Offers
#9 -- Advance Fee Loans
#10 -- Employment Offers