Marketplace Scams: How to Buy and Sell Without Losing Money

Why a private sale is different from a store

On an online marketplace you are usually dealing with another person rather than a business, and the platform is hosting the listing rather than selling the item. That changes what happens when something goes wrong, and it is the fact most marketplace scams are built around.

Platforms differ widely. Some offer purchase protection when the payment runs through their own checkout, with a claim window and a defined process. Others provide nothing beyond a way to message a stranger. The Federal Trade Commission recommends reading the marketplace’s policies before buying, because the protection you get depends on which of those you are using.

The second difference is identity. A store has a registration, an address, and a history. A marketplace account can be days old, and a long list of positive ratings can belong to an account that was recently taken over. Recency and consistency tell you more than a total count.

Buying: the checks before you pay

Most marketplace losses on the buying side come from paying a stranger for something that never arrives, so the checks worth running are the ones that happen before any money moves.

• Look at the seller’s account age and history. A new account, no history, or a profile with almost nothing on it is a reason to use the platform’s checkout rather than a private transfer.
• Check the photographs. A reverse image search often shows the same pictures used in other listings or lifted from a retail site. Ask for a new photo of the item with something specific in the frame, such as today’s date written on paper.
• Treat a price far below market as the question. Scarce items advertised well under the going rate, with pressure to decide now, are a common pattern.
• Read the listing for reused text. Search a distinctive sentence from the description and see whether it appears elsewhere.
• Be careful with items that cannot be inspected. Event tickets, gift cards, and electronics with account locks are frequent targets, because the problem only appears later.
• Keep the conversation in the platform. It is the record you will need if you file a claim.

For a seller who claims to be a business rather than a private person, the checks are different and more demanding. Our guide to online shopping scams covers how to check a store before you buy.

Buying: the payment method is part of the protection

How you pay decides what you can do afterward, which makes the payment method one of the few real protections in a private sale. The FTC’s guidance for marketplace buyers is to use safer methods such as a credit card, which carries legal protections if something goes wrong, and to avoid wire transfers and gift cards because paying that way is like sending cash.

A payment app transfer to another person is closer to cash than to a card payment. These transfers are generally treated as payments you authorized, which is a different category from an unauthorized charge, and that difference changes what the payment company is obliged to do. Send money to a stranger in a payment app only if you are prepared to lose it.

Cash is reasonable for a local pickup where you inspect the item and take it with you. It is not reasonable for anything shipped.

If a purchase goes wrong, understand which route you are using before you start. A refund comes from the seller and a chargeback comes from the card network, and they have different processes and different deadlines. Our guide to chargeback versus refund explains when each one applies, and how to dispute a credit card charge covers the written notice and the evidence to keep.

Selling: the overpayment and the request to send money back

The oldest marketplace scam aimed at sellers is the overpayment. A buyer agrees to your price, then sends a check, a money order, or a transfer for noticeably more than the amount, explains it as a mistake or as covering a shipper or a mover, and asks you to return the difference.

The check is fraudulent, and the mechanics are what make the loss large. Under federal funds availability rules explained by the Consumer Financial Protection Bureau, a bank generally must make deposited funds available within a set number of days. That is not the same as the check having cleared. When it is returned unpaid, the bank takes the full amount back out of your account, and the difference you already sent was your own money.

The FTC warned about check overpayment scams aimed at people selling cars and other valuable items long before marketplaces existed, and it is still warning about the same pattern today. The rule that covers every version: nobody legitimate sends you more than the price and asks you to send part of it somewhere else.

Related requests belong to the same family. A buyer who wants you to pay a shipping company they chose, cover an insurance fee that will be reimbursed, or accept payment and forward part of it to a third party is describing a loss, not a sale. Our guide to fake check scams and check fraud covers what happens after a check comes back.

Selling: the verification code a buyer asks for

A buyer messages about your listing and says they have been burned by fake sellers, so they want to confirm you are a real person. They will send a code by text, and you just need to read it back. There is no such verification service, and the code is not about you.

What is actually happening is described by the FTC: the code is generated by a service that is being set up in your name, using your phone number to confirm it. Once the code is handed over, the account belongs to someone else and is tied to your number, which can then be used against other people.

The same technique is used against accounts you already have. A code sent to your phone is the last step of a login or a password reset, and anyone asking you to read it out is asking for the key to something. Legitimate companies do not call or message to ask for a code they just sent you.

The rule is short and covers every version: never share a verification code with anyone, for any reason, including someone who says they sent it. If you already shared one, check the accounts tied to that phone number, change those passwords from a device you trust, and review any service where your number is listed as a recovery method.

If a code was used to take over an account that holds money, our guide on what to do when a bank account is hacked covers the order of the first hour.

Why leaving the platform is the pivot

On both sides of a marketplace transaction, the moment someone pushes the conversation or the payment off the platform is the moment the protections and the record disappear. It is worth treating that request as the signal rather than as a convenience.

The reasons offered sound helpful. The platform’s fees are high, so the seller offers a discount for a direct transfer. The messaging is slow, so the buyer suggests continuing by text. The platform is unreliable, so someone proposes a different escrow service, with a link. The FTC’s advice to sellers is to be cautious about anyone who insists on moving the deal somewhere else.

Escrow deserves particular care. A link to a service you have not heard of, sent by the other party, is a common way to collect a payment and disappear, and the confirmation emails that follow can be produced by the same operation. If escrow is genuinely needed, find the service yourself and confirm it independently rather than following a link.

Shipping is the other place deals move off the rails. A buyer who wants to send their own courier, use a shipping label they provide, or have the item sent to an address different from the one on the payment is setting up a dispute you will not win. Ship to the address the platform has, use tracking with delivery confirmation, and keep the receipt.

Rules for meeting in person

For a local sale, the handover is where safety and payment problems meet, and a few fixed rules remove most of the risk without making the sale harder.

• Meet in a busy public place during daylight. Many police departments host exchange zones in their parking lots, often with cameras, and they are free to use.
• Bring someone with you, and tell a third person where you are going and when you expect to be back.
• Do not invite a stranger into your home, and do not go to theirs. For furniture or appliances that cannot be moved, have another adult present.
• Inspect the item before money moves. For electronics, confirm it powers on and is not locked to someone else’s account.
• Prefer cash for a local handover, count it in front of the other person, and be wary of a payment app transfer you cannot confirm has settled in your account before the item leaves your hands.
• Treat a screenshot of a payment as no payment at all. Confirmations are easy to fake, so check your own account.
• Do not accept a check, a money order, or a cashier’s check for a same-day handover. Any of them can be returned unpaid after the item is gone.

If a meeting feels wrong when you arrive, leaving is a complete answer. No sale is worth staying for.

What to do if money already left

Start with the company that moved the money, because how quickly you report is the part you still control. Then preserve the record, then report.

1. Call your bank, card issuer, or payment company immediately. Say the payment was part of a fraud, ask whether a dispute, recall, or reversal is possible, and note who you spoke with and when. If you deposited a check from a buyer, tell the bank and ask whether it has actually been paid by the issuing bank.
2. Stop sending anything else, including a refund of an overpayment or a fee described as releasing the transaction.
3. Save the whole record before anyone is blocked. The listing, the full message thread, the profile, receipts, tracking numbers, the check and its envelope, and any phone numbers or email addresses.
4. Open a claim with the marketplace if the payment ran through its checkout, and note the claim deadline. Report the account so it can be removed.
5. If you paid by card, follow the dispute process rather than waiting for the seller. Our guide on chargeback versus refund explains which route applies.
6. Report it to the FTC at ReportFraud.ftc.gov and to your state attorney general.
7. File with the FBI at ic3.gov if a wire transfer, cryptocurrency, or a shipped item across state lines was involved.

Recovery is possible in some cases and not guaranteed in any of them. Card payments and platform checkouts have the clearest routes. Wire transfers, gift cards, and cryptocurrency are much harder to reverse. Our guide on how to report a scam and try to recover your money explains what each agency does with a report, and why a later offer to recover your funds for a fee is usually the same operation returning. The Consumer Financial Protection Bureau lists the same reporting routes and accepts complaints about how a financial company handled the problem.

Marketplace scam FAQ