Delivering Trust in Classified Marketplaces

Written by Jen McKeeman

13 June 2022

Trust, but verify.’

Ronald Reagan, former US President.

Online classified marketplaces have exploded in popularity in recent years with the trend looking like it’s set to continue. A push to more sustainable consumption coupled with rising living costs, point towards such platforms enjoying further growth. 

Online classifieds are particularly appealing to consumers to sell their unwanted wares due to their speedy setup, ease of use and often ‘free to list’ model. Gumtree, Craiglist and Facebook Marketplace are some of the bigger, well-known players in this space, with newer entrants such as Vinted, Shpock and Leboncoin. This category of marketplace, however, like all marketplaces, is open to abuse from bad actors looking to exploit vulnerable or inexperienced buyers and sellers. The difference with online classifieds is that there could be localised security issues in the case of buyers and sellers meeting up in person.


What safety measures do online classifieds need?

Traditionally, classified ads were the domain of newspapers, offering advertisers cheap notices classified by specific categories - e.g. furniture, jobs, cars. They gave shoppers an easy way to browse local offers, usually from private sellers. It’s likely replying to these adverts decades ago carried the same risks associated with meeting up with strangers etc., but it’s possible there was more inherent trust in people generally and the newspapers running the ads. Fraudulent postings in newspapers were rare; something it has been hard to replicate online. In 2019, Business Insider released a report stating that if Craigslist was a city, it would be one of the most dangerous in the US. 

However, the progression from print to digital was inevitable and has proven to be quite lucrative for some digital players. The prevalence and increasing sophistication of online threats posing risks to platform users, means it is essential that there are strong safety measures and guidelines in place to keep users of online classifieds safe.

Clear terms of service policies

There should be easy to understand terms of service for sellers to follow when they register with the platform to list items, and for buyers to agree to when they sign up. These terms should clearly state guidelines for appropriate platform use. 

Consideration should also be given on how to notify users of changes made, such as updated marketplace regulations around reviews, and how users can report concerns to the platform.


Buyer & seller reviews

Reviews give consumers a level of confidence when buying online. Reviews are particularly important for classifieds when buyers and sellers meet up in person to complete the sale. Buyers want some reassurances that the sellers they are meeting are genuine. Being able to offer verified reviews improves trust and builds platform credibility. The EU Omnibus Directive requires platforms trading in the EU that claim to authenticate reviews to be transparent with their users about this process, which gives users even more confidence.


Ongoing monitoring to understand user behaviour

Keeping users safe requires ongoing monitoring. Not just knowing who your users are (through ID verification) but also understanding their day-to-day behaviour is vital for the safety of your community. Each interaction between buyers and sellers creates the potential for harmful or suspicious activity. Scams, fake accounts, email phishing and mobile phone phishing (smishing) look to dupe unsuspecting users. 

Other scams involve users being diverted off-platform. Known as bypass, or disintermediation, this is risky for both parties as personal information, such as phone numbers or bank information, could be gained fraudulently. Once off-platform, the safety measures provided by the platform no longer apply. Buyers or sellers looking to connect on WhatsApp, rather than use the platform’s messaging tools, should raise concerns of suspicious behaviour.


Embed trust and safety mechanisms early in the process 

There’s inherent friction with trust, safety and growth for most businesses but employing safety mechanisms early rather than as an afterthought, or something enforced by regulation, encourages customer longevity and lays the groundwork for successful growth.

At Pasabi, we use AI technology to help our customers identify patterns of negative behaviour to eliminate bad actors, scams, fake reviews and fake accounts. Our technology helps our customers decide who they can trust without unnecessary friction.

Want to find out more? Check out how we can help platforms like yours understand where your potential risks lie and how to protect your users and marketplace health as you grow.