Considering recent auctioneering professionals and their businesses falling victim to several online scams, the South African Institute of Auctioneers (SAIA) urges consumers to always verify the credentials of online auctioneers prior to making any purchases.
SAIA is encouraging members of the public to apply vigilance and caution when they wish to purchase items through an online auction. Scammers have been known to duplicate websites as well as social media pages of reputable auctioneers to lure members of the public into scams.
“These scammers use our products and industry to scam consumers. They use their power of persuasion to get people to pay for products which they have not yet seen,” explains SAIA member and WH Auctioneers Director, Martin Dibowitz.
Martin explains that these scams can be best described as a “middleman scam” where they have devised many avenues to get people to part with their money. An example of this is when they solicit sellers online to advertise on their behalf with a promise of commission on the sale, however, once payment has been made, there is no commission for the seller and no car for the buyer and the scammers have long disappeared into cyberspace.
“They also get money mules to open bank accounts on their behalf with no trace back to them. What they do is offer people a nominal fee of say R1000 and have them open bank accounts at the retail banks which usually allow for the account to be opened quickly. These are then linked to the scammers’ cellphone numbers with no means to really trace them. They have also used the method of registering with an auctioneer under a pseudonym and get the target to pay a deposit into the auctioneers’ legitimate bank account. They will then call the auctioneer and request a refund claiming it’s a mistake.”
“They have also used desperate job seekers as part of their scams – they lure them into selling a portfolio of vehicles via a duplicated auctioneers’ social media profile. These people think they are employed by a legitimate company doing remote work as a sales representative. Once they’ve secured clients and obtained deposits which are paid into the scammers’ accounts, they then try and collect their promised commission from the auctioneer, and it only becomes apparent then that they’ve been used in a scam and no payment will be made,” Martin continues.
These scams are well planned and meticulously executed by a wide network of individuals each playing a role in the deception of unsuspecting targets. The fluidity and mostly unregulated nature of social media has created the perfect breeding ground for their crimes. This has caused tremendous reputational damage to many complying SAIA members and has spread distrust within an industry which has come to help many people dispose of and acquire assets through the trusted method of auctions.
Members of the public are encouraged to always check details provided by auctioneers to ensure that all the dealings are above board. SAIA has an open-door policy and are willing to assist in the verification of auctioneers’ details. Through this and the constant monitoring of these scammers, SAIA and its members have been able to thwart many scams before people lose thousands of rands.
Education is important in creating awareness – if people understand the processes of participating in an auction, they can pick up easily on the red flags and avoid being scammed. These pointers will help in identifying whether a deal is legitimate or possibly a scam:
- Items on auction can only be purchased in the auction and cannot be reserved to be purchased prior to or after the auction.
- Verification and viewing of the assets are key – you must be present and assess the asset thoroughly.
- Confirm and verify banking details.
- Verify the credentials of the auctioneer with SAIA.
- Auctions are transparent and simple – auctioneers will never request a viewing fee or payment upfront; they will only request a refundable deposit to register to bid in the auction.