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Non-payment / non-delivery fraud

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Non-Delivery of Merchandise

Non-delivery of goods or failure to ship merchandise is the simplest type of auction fraud. A seller lists an item, the item is purchased, the seller collects the funds, and the seller does not send the item.  Sometimes, this type of fraud is done as part of a larger phishing scam in which a shill auction is set up solely for the purposes of obtaining credit card information or other details from a buyer. In other cases, however, the goal is simply to take buyer funds without properly following through on the transaction.

In most situations, a buyer will simply make a claim with Paypal or eBay and the money will be taken from the seller’s account and returned to the buyer. However, things become more complicated if other payment methods were used, if the seller is an international seller and Paypal protections do not apply, or if a seller was involved in a large-scale fraud scam to defraud many buyers of their funds.

Tips for Avoiding Non-Delivery of Merchandise:

  1. Make sure you are purchasing merchandise from a reputable source.
  2. Do your homework on the individual or company to ensure that they are legitimate.
  3. Obtain a physical address rather than simply a post office box and a telephone number, and call the seller to see if the telephone number is correct and working.
  4. Send an e-mail to the seller to make sure the e-mail address is active, and be wary of those that utilize free e-mail services where a credit card wasn’t required to open the account.
  5. Consider not purchasing from sellers who won’t provide you with this type of information.
  6. Check with the Better Business Bureau from the seller’s area.
  7. Check out other websites regarding this person/company.
  8. Don’t judge a person or company by their website; flashy websites can be set up quickly.
  9. Be cautious when responding to special investment offers, especially through unsolicited e-mail.
  10. Be cautious when dealing with individuals/companies from outside your own country.
  11. Inquire about returns and warranties.
  12. If possible, purchase items online using your credit card, because you can often dispute the charges if something goes wrong.
  13. Make sure the transaction is secure when you electronically send your credit card numbers.
  14. Consider using an alternate payment service.

Other related types of fraud:


  • Charity fraud: Using deception to get money from individuals believing they are making donations to legitimate charity organizations, especially charities representing victims of natural disasters shortly after the incident occurs. Learn More
  • Internet auction fraud: A fraudulent transaction or exchange that occurs in the context of an online auction site. Learn more
  • Non-payment of funds: Fraud occurring when goods and services are shipped or rendered but payment for them is never received.
  • Overpayment scheme: An individual is sent a payment significantly higher than an owed amount and is instructed to deposit the money in their bank account and wire transfer the excess funds back to the bank of the individual or company that sent it. The sender's bank is usually located overseas, in Eastern Europe for example, and the initial payment is found to be fraudulent, often after the wire transfer has occurred.
  • Re-shipping scheme: An individual is recruited to receive merchandise at their place of residence and subsequently repackage the items for shipment, usually abroad. Unbeknownst to them, the merchandise was purchased with fraudulent credit cards, often opened in their name.
Tips for avoiding these types of fraud:

  • Purchase merchandise from reputable dealers or establishments.
  • Obtain a physical address rather than simply a post office box and a telephone number, and call the seller to see if the telephone number is correct and working.
  • Send an e-mail to the seller to make sure the e-mail address is active, and be wary of those that utilize free e-mail services where a credit card wasn’t required to open the account.
  • Consider not purchasing from sellers who won’t provide you with this type of information.
  • Purchase merchandise directly from the individual/company that holds the trademark, copyright, or patent.




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