Trying to buy or sell an expensive item online? Or even just renting out an apartment? Fraud artists are preying on both buyers and sellers on eBay, Craigslist and other Internet websites that advertise goods and services. Several devious scams are being run to separate you from your possessions and money by international thieves. Here's some ways to avoid these classic stings as part three of our tribute to Fraud Prevention Month in March:

Overpayment schemes and fake escrow/cheque scams haunt Internet auctions and classifieds 

Take extra care whenever selling or buying anything online

It can happen to anyone, even me. As a brand new seller on eBay I was trying to move an Xbox 360 last year. Within a day of posting my item, I was contacted by a potential buyer who wanted to purchase my gaming system ‘outside' the eBay auction system. He suggested that he could pay a better price if we did a direct transaction rather use eBay's payment system with its attached selling fees and percentage commission of the final price. Of course, that meant more money in my pocket. It certainly sounded like a sweet deal.

Scammers always appeal to a base human element - greed. They tempt us with opportunities for easy money by somehow beating the system. But whether it's millions of dollars offered by the Nigerian 919 email scam or just a couple of extra hundred of dollars tacked onto your auction price, it's always the same basic characteristic - greed. And that's how these various scams often start ... with a fundamental appeal to our greed. Here's an outline of how the schemes usually work:

Overpayment Swindles Bite You Twice:

• • A scammer purchases a $2,000 laptop on eBay/Craigslist and sends the vendor a bogus cheque for $3,000 by mistake. The scammer will then contact the vendor and ask that they send a cheque to cover the overpayment of $1,000. It's a double whammy - you lose the computer plus extra thousand dollars for your troubles.
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• • A reply to your rental ad for a home, apartment or basement suite comes from a wealthy "out-of-town" parent or the overseas employer of a young lady. They send a sizeable check to cover the damage deposit, expenses and even several months rent. In turn, all they simply ask you to give the extra cash for expenses to their ‘daughter' or ‘employee' ... keeping a little off-the-books for yourself. It's another double hit - you not only lose the cash you hand over, you lose a month's rent because they have no intention of ever becoming your tenant.

In both these scenarios, the checks or money orders are completely bogus, but because the bank notes are drawn on foreign banks, it takes up to 25 days to discover the forgeries. By the time the payment is returned as counterfeit or stolen and charged back to the seller's bank account, the scammer has received your money (along with any merchandise or services).

Basically these are classic fake cheque scams with a twist.

Fake Escrow Websites Can Steal Thousands in a Keystroke

By taking advantage of Net auction winners' inherent trust of escrow sites, the con artists are using phony escrow websites to steal as much as $40,000 at a time from big-ticket auction winners. Customers worried about getting scammed in Internet auctions customarily turn to escrow services.

Legitimate escrow companies act as a third-party referee, taking payment from buyers but not releasing the money to sellers until the goods are delivered. Escrow companies are supposed to be the safest way to avoid fraud on the Internet, particularly when dealing with Internet auction sales of big-ticket items such as jewelry or cars.

But con artists are tricking Net buyers and sellers into wiring thousands of dollars to fraudulent bank accounts. These criminals built elaborate fake escrow Web sites, with convincing names like Simple-Escrow.net and WhyEscrow.com imitating genuine escrow companies. To an untrained eye, it is impossible to tell the difference.

Auction watchdog Rosalinda Baldwin, who runs TheAuctionGuild.com, says fake escrow websites are a particularly successful scam because they catch Internet users when their defences are low.

"People don't even realize there is such a thing as fake escrow," she said. "It doesn't enter their mind there might be companies fraudulently setting these things up."

The fraud can work both ways, added Baldwin. A fraudulent seller can point a buyer toward an escrow site he or she controls, then simply grab the buyer's cash without ever sending the merchandise. Or, a fraudulent buyer can trick a seller into shipping items that haven't been paid for, simply by sending an official-looking e-mail from a fake escrow service which says: "We have received payment; go ahead and ship the items."

eBay owns and operates Escrow.com, which is obviously a completely legitimate protection service for buyers and sellers. On the other hand, you should never buy or sell items to a consumer who insists on using a specific escrow service. In fact, the simplest way to detect scam artists is just suggest a different escrow company. If they protest, they are most likely conmen.

Consumers should never buy or sell items to a consumer who insists on using a specific escrow service. Propose an alternative - if that disturbs the other party, they are almost certainly con artists.

If the escrow service and the seller appear to be working closely together, that's also a bad sign. Victims often get instructions on how to send money to the escrow company from the seller's e-mail address.

And experts say.

Tips to Avoid Overpayment, Fake Cheque & Bogus Escrow Scams

eBay, Craigslist and other online auction websites are concerned with security. They uniformly urge consumers to use caution and commonsense when dealing with any financial transactions:

• • Deal only with locals. Most non-local inquiries are scams, especially from any international or overseas replies.

• • Never wire funds to a stranger or bank outside of the country, via Western Union or any other money transfer carrier. It's always a bad idea.

• • Be wary if the other party wants to use an escrow service such as BidPay or Squaretrade. Use a recommended website such as escrow.com.

• • Never give out personal financial information (checking account number, Social Insurance Number, eBay/PayPal info, etc.)

• • Trust your instincts, and always remember that the most important rule -- caveat emptor (buyer beware) -- applies to any transaction on-line when money is involved.

I love the Internet. I buy and sell items on line frequently. However, I'm careful with every transaction. Check out (and double-check) your buyer or seller before sending a dime anywhere. It pays to be prudent ... it the best way to avoid being scammed.