Online auction giant eBay is made up of millions of users, both buying and selling merchandise every day.http://www.quantcast.com/ebay.com While most of the transactions occur without incident, scams have become an unpleasant reality of shopping and selling on eBay. This guide will teach you how to spot an eBay scam, and keep yourself safe so that you don't fall victim to those using eBay to commit fraud.

Manipulating any aspect of the eBay system could be a scam. Purposefully defrauding another user on eBay is not only against all eBay policies, it is also illegal and could result in prosecution.

Both eBay buyers and sellers can become the victim of a scam. In the steps below, you'll see how you can identify some of the common scams found on eBay todayhttp://cgi3.ebay.com/ws/eBayISAPI.dll?ViewUserPage&userid=red-flags and how you can avoid them. Once you know how these scams work, you'll easily spot them saving yourself time and money.

Buyers are perhaps the most at risk and you can do your part to avoid these scams.

1. Asked to complete transaction outside of eBay. Always use eBay approved payment and transaction tools and always refer to eBay for your limits of Buyer Protection.http://pages.ebay.com/help/buy/protection-programs.html
2. Shill Bidding. Watch for users that are bidding on the same items as you. Shill bidding is when other users "help" the seller by bidding on their item against you, raising the price.http://reviews.ebay.com/Scam-Watch-The-Most-Popular-Scams-on-Ebay_W0QQugidZ10000000000025238
3. Bid Shielding. This is similar to shill bidding as the purpose is to inflate the price of an item, but the bidders then retract the bids, with you being left as the winner of an unnecessarily high priced item.
4. Phishing Email. If you receive an email from eBay, you can be sure that it is legitimate by visiting your eBay home page and checking your messages. If it was from eBay, you'll also receive the information here. If you aren't sure, report the email to eBay.
5. Seller Feedback. Always check the feedback for sellers. Was feedback left within minutes of winning an auction, for an item that should have been shipped? Illegitimate users will "buy" positive feedback.
6. Offer of Free Shipping for items and locations where shipping is usually quite expensive. Also beware of requests for payment to be sent to anywhere other than the listed Paypal address on eBay.
7. Stock Photos. While this doesn't always represent a scam, it is not a definite indication that the seller actually has the item in hand.
8. Misrepresented Items. Either misleading listings, or selling of fake and reproduced collectibles. When purchasing items of great value, be sure you carefully read the listing and have knowledge of what you are buying.

Sellers are not exempt from eBay scams. Common scams against sellers are:

1. Fraudulent Returns. If a buyer is overly interested in how you handle returns, you may be at risk to have a "Switch" return. The scammer buys and receives your item, and returns you their old or broken item.http://reviews.ebay.com/Scam-Watch-The-Most-Popular-Scams-on-Ebay_W0QQugidZ10000000000025238<ref/>
2. Request to Ship to different address. Many scammers are using other buyers accounts to defraud, and therefore will make a purchase with an innocent buyer's account, and ask you to ship it to a different address.
3. Accept different tender. Scammers may ask if you would accept a personal check, money order, or other unauthorized payment method. Paypal offers protection for you only if you use the proper Paypal tools.<ref>http://pages.ebay.com/help/buy/protection-programs.html<ref/>
4. Outlandish Offers. If you receive an offer for your item way above your asking price, it is a scam. Decline the offer and report the user ID to eBay.
5. Bidding scams. Similar to those worked on buyers, the seller scam also works with two separate bidders. One bids low, the other very high. At the last minute the high bidder retracts their bid, leaving the item sell at the incredible low price. You can avoid these bidders by setting a reserve price for items.

What should you do if you think you may come across a scam listing or may be the victim of a scam?

1. Notify eBay Trust and Safety. At the bottom of each listing page is a REPORT link. This will allow you to alert eBay to the contents of the listing and they can investigate further.
2. If you have already been the victim of an eBay scam, contact your local authorities. If you are still within the time limits to file a dispute on eBay and Paypal, you need to do so. Even if it is a misunderstanding, you are giving the seller the opportunity to respond, and protecting yourself if it is a scam.
3. If you are contacted about a transaction outside of eBay. Politely direct the user to eBay's policies regarding these transactions and decline their offer.
4. If you feel as though an item you are bidding on may be have scam bids, notify eBay and request to retract your bids. You certainly want no parts of the scam, and you need to alert the matter to eBay.