“Scammers have been known to duplicate websites as well as social media pages of reputable auctioneers as a means to lure unsuspecting buyers,” warns the South African Institute of Auctioneers (SAIA) member, 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. In one instance they will 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 goods 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 R1 000 and have them open up 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. Or they use a method of registering with an auctioneer under a pseudonym and get the target to pay a deposit into the auctioneers’ legitimate bank account. The scammers will then call the auctioneer and request a refund claiming it’s a mistake.”
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.
Thwarting the scam
“SAIA has an open-door policy and is 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,” says Martin.
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 is key – you have to 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.