How to avoid online fraud

By Baek Byung-yeul, Nam Hyun-woo, Park Ji-won

The trading of second-hand goods ranging from smartphones and clothes to almost everything is emerging as a new consumer trend in Korea amid the worsening economic polarization.

According to Statistics Korea, the size of the second-hand market is estimated to be approaching nearly 10 trillion won ($8.9 billion), and online trading is presumed to account for up to 90 percent of the volume.

As the number of people who are trading their used items grows, however, cases of scamming have also increased.

Last year, a group of teenagers in Busan were arrested on charges of having sold bricks instead of the used iPad they advertised through peer-to-peer e-commerce.

The suspects allegedly pocketed around 17 million won ($15,000), deceiving over 40 victims, according to police.

As the news that the students even used fake IDs to avoid being detected spread to the public, many consumers were shocked by their sophisticated scheme..

Other than sending false items, there is another type of online scamming, which gets victims to make deposits first.

Choi Yun-hyun, a 35 year-old Seoulite, suffered from online fraud after attempting to buy tickets for an outdoor water park resort this summer.

Choi, who wanted to share his summer vacation with his family there, worried a lot because the tickets for spending a single day at the resort usually cost about 80,000 won ($71) per person. Adding food expenses and fuel costs, it would mount up to 500,000 won ($450) for his family.

Thus, he decided to check out one of the major online peer-to-peer websites, hoping to find discounted tickets. Looking into a slew of articles selling discount vouchers, he finally found a posting offering four tickets for 150,000 won ($130), about 60 percent lower than its original price.

Choi wired the money to the seller without hesitating, and counted the days until he would receive the tickets in mail.

However, Choi didn't get tickets though he waited for several days, and the seller didn't pick up the phone.

"After spending a few days, I realized that I had been scammed. I reported my case to the police right away, but it was too late," he said.

"The answer I heard from the police was it will take a long time to get my money back. Eventually, my vacation time this year was totally messed up," Choi added.

There is no perfect way to detect such frauds occurring online. Instead, there are some tips to prevent you from being deceived.

Check the seller's phone number. This might be very obvious, but at the same time, is usually neglected. Instead of email or messenger chatting, get the seller's phone number at least so you can contact him without being ignored.

Talking via phone is recommended rather than negotiating with text messages. Through actual conversation, you can figure out how your counterpart reacts immediately to your suggestion or offer.

Also, a phone number is a way to trace your counterpart, if he or she deceives you.

Phone numbers of swindlers who have multiple-records of online trading fraud are shared within online trading communities, as previous victims post their experiences and their identity.

On www.thecheat.co.kr, an online community of victims of such frauds, police and netizens are sharing information about such the crimes.

The government also provides the identity and phone numbers of sellers who have fraud records.

Another precaution is to check whether the seller's name and the holder's name of account which the seller asks you to send money matches.

According to police, in some cases, swindlers ask buyers to send money into an account of a third person's name, saying the account belongs to their family member.

However, those moves are widely used by swindlers to evade police traces, as used in the aforementioned case.

To prevent e-payment fraud, the government advises using an escrow service. Escrow generally refers to money held by a third-party on behalf of transacting parties.

If the buyer transmits money to the escrow service, the seller can confirm that the money is deposited in the service.

After confirming, the seller sends the product to the buyer. If the buyer receives the product and approves the trade, the buyer can get the money from the escrow service.

Through the third party, the buyer can ensure he or she won't be swindled.

For consumers wanting safe trading, using "Recycling of Resources Market," run by the Ministry of Environment, is a better choice.

Last December, the government launched this re-use market in order to establish fair trade order and quell environmental and ethical concerns. It deals with every "recycleable" product including used home appliances, used furniture, second-hand children's items and used electronics. There is no commission fee for dealing with used ones.

As of July, the number of members using this market reached nearly 65,000 people and marked over 220,000 transactions after only eight months.

For more information, visit its official webpage at www.re.or.kr or call (032) 590-4242.