Auctioneers turn to real life ID checks

Druce said that consumers can secure a higher level of protection against being ripped off if they can see that the seller’s ID has been independently verified.

“Providing our members with a safe and secure environment is paramount to our success and we get excellent feedback from customers on how they feel comfortable trading on OZtion,” Druce said.

OZtion, Australia’s second largest online auction service, attaches an identification ranking to each item for sale on its website.

Sellers can verify their identity with a 100 point ID check at any Australia Post branch, as well as phone-based ID checks, photo, address and credit card verification. If sellers adopt the 100 point ID check, OZtion covers the item to a higher amount under OZtion’s Buyer Shield program.

Druce said, “This system encourages the sellers to secure a higher level of identification, because it drives more sales as buyers feel more comfortable transacting with them.”

A spokesperson from eBay agreed that ID checks were helpful in preventing fraud.

“In Australia, we have a de facto 100-point ID check. To sell on eBay, your account needs to be linked to a financial instrument – a credit card or bank account, which requires a 100-point ID check.

“You also need a Paypal account, and to get a Paypal account you need a credit or debit card, which again requires a 100-point ID check to obtain.”

eBay also pursues new sellers with irregularities in their registration. “If we see things in the registration process that concerns us, we contact them for further identification. This requires a working phone number, and their account will be locked until we approved them.”

But seller account identification had to extend beyond the registration process, said eBay.“In this day of account takeovers and phishing threats, identity checks can be irrelevant. Firstly, people can easily get 100 points of identify that are not necessarily theirs. Secondly, people can hijack accounts."

Both eBay and OZtion emphasised the necessity of constant monitoring.

Said eBay, “We put our effort into monitoring activity. When accounts act in certain ways, or in a way that isn’t typical to their history, that is the best indication that something’s changed or something’s going wrong.

“When an account is fraudulently taken over, in 98 per cent of cases it is locked down within 24 hours, and that’s industry leading. That’s because we spend a lot of effort on activity detection.”

OZtion agreed. “We have a model whereby we monitor seller behaviour extremely closely and we have an identification process that ensures buyers know they are buying items from reputable sellers,” said Druce.

“We always act quickly and responsibly if we notice any possible suspicious behaviour on our auction service. The key is to be pro-active in fraud prevention, and not act after the crime has been committed.”

According to Druce, OZtion’s security identification model and fraud protection services meant OZtion had a very low likelihood of fraudulent sellers manipulating its members.

OZtion said it recognised that low-level fraudsters would always try to target innocent traders, but the company’s mix of identification services and monitoring systems are working well.

eBay is Australia’s and the world’s largest online auction house, with over 276 million users worldwide. OZtion is the second largest online auction provider in Australia with more than 330,000 members and more than 820,000 items listed for sale. The provider's membership has jumped 70 per cent in the past year.

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