e-Security
Undesirable and Fraudulent Behavior in Online Auctions
Presented By Dr Jarrod Trevathan 23 Sept 2009Full Presentation PowerPoint File 1.5 Mb.
About the Presentation:
Online auctions are a popular means for exchanging items over the Internet. However, are many inherent security and fairness concerns? Participants can behave in an undesirable and fraudulent manner in an attempt to gain an advantage at the expense of rivals.This seminar investigates undesirable and fraudulent behavior in Online auctions. We examine the following practices: bid shielding,
shill bidding, bid sniping, siphoning and selling non-existent or misrepresented items. We describe the characteristics of such behavior and how to identify it in an auction. We also provide recommendations for recourse against undesirable and fraudulent participants.
Key Forum Issues
- What are the e-Commerce security threats?
- How can Online auctions be manipulated by buyers?
- How can Online auctions be manipulated by sellers?
- How can you minimize your chances of being a victim of fraud?
- Can you identify Online fraudulent behavior?
About the Presenter:
Dr Jarrod Trevathan is a researcher and lecturer at James Cook University. He has been actively involved with investigating e-commerce fraud and security issues, and proposing counter measures to help protect individuals from becoming victims of Online fraudulent activities. Dr Trevathan has over 40 publications in the area, and works with local industry on developing secure e commerce applications. Dr Trevathan is an Associate Editor for ACM Crossroads, the E-commerce track chair for the International Conference on InformationTechnology – New Generations in Las Vegas USA, and also periodically reviews papers for numerous journals and conferences on security-related issues. Jarrod has published a book call Shilled dealing with the topic discussed.
Event Summary
- Online Auctions started in the mid 1990's with a worldwide audience and participants from anywhere
- eBay started in the mid 1990's, Yahoo is popular in Asia and Europe, others include Ubid, Oztion and Amazon
- Number 1 fraud Online is credit card fraud.
- Number 2 fraud Online is Online auctions.
Why is Online Auction fraud popular?
- Easy to commit
- Anonymous
- Lack of accountability (International rules)
- Auctioneers do not police auctions
- Law undefined
Auction Goals
- Seller - highest possible price
- Auctioneer - highest commission
- Buyer - lowest possible prices
Bid Shielding
Colluding to keep a bid low. Multiple accounts used. First bid low, second bid on another account very high, no more bids likely, second bid retracted just before finish leaving a very low winning bid.Online auctioneer can close accounts for retracting bids but other accounts can be created easily.
Shill Bidding
Using fake bids by friends to inflate the price. If friend wins then items is resold. This is a prosecutable offense. Seller goal is more revenue.Goal is to raise the price but not win the action. Real buyer wants to win the auction with the lowest price.
Proxy bid system of legitimate bidders helps shill bidders get the prices up.
Shill profile:
- Bids for one particular seller
- High bid frequency
- Low auction wins
- Often is first bidder to start the bidding process
- Bids quickly after other bids
- No bids at the end of the auction period
Shill Detection
Large Online auction houses do not publish their security policies.ACCC is not looking into it.
Online auction house can shut down accounts which can upset people and big sellers with large reputations.
Data mining can be used to find likely shill bidders.
Shill Score concept
A score can be calculated on how likely a bidder is shilling. A higher score is more suspicious.Other bidders can enter the auction based noting the shill score of other participants.
Shill Score Factors
- Number of auctions they have participated in
- Number of bids done
- Number of auction wins
- Speed of bidding
- Size of bid increments
- Time before first bid is made relative to group average
Bid Snipping
This is the bidding only in the last moments of an auction. Bidding this way helps reduce Shill bidding fraud. The winner can be restricted to those with the fastest connection with software performing the bid in the last seconds of an auction.A solution to this issue would be a random time in minutes extension if a last minute bid is received to allow conventional bidders to respond.
Bid Siphoning
Outsiders observe an auction. Outsider offers similar item for sale to the bidders for less. The advantages for the outsider is free advertisement and no auction fees.Online auction software can shield bidders identity and contact details to avoid this issue. Bidders should report any siphon contacts to the auctioneer. Not dealing with siphon contacts eliminates their advantage.
Misrepresenting or Non Existent items
This is when a seller does not deliver or is not to specification of the item description.Defenses
- Look for fake photos
- Ask the seller questions. The seller may still lie.
- Look at the feedback rating. Examine recent transactions for many low cost goods which can artificially raise feedback score.
- Review what dispute resolutions procedures are available. This can be a lengthy process.
- Insurance
Escrow Fraud
Sellers who want to use fake escrow services. They can be copies of reputable sites but flaws in the website build could be evident. Check the URL. Use your preferred escrow service if required.Pack Wolf Feedback Attack
The use of multiple negative comments can destroy a business credibility.Online Fraud Conclusions
- There are numerous types of fraud
- Legal measures are ineffective
- Buyer beware
- Fraud casts doubt on Online auctions as a trading platform