Yahoo Purchases to Be Insured Against Fraud

Yahoo Inc. is expected to launch today new initiatives that protect purchases made on its auction and shopping sites.

The program is backed by insurance obtained from Lloyd’s of London, one of the industry’s leading insurance carriers.

Yahoo’s moves are designed to “add another layer of confidence for consumers during the shopping season,” according to Brian Fitzgerald, producer for Yahoo auctions. “Fraud is very low,” he said, noting that it represents less than 1% of all transactions on the Yahoo commerce site. For the first three quarters, Yahoo’s transactions totaled $3 billion in sales.

For its auction site, the protection targets transactions, whose closing price is above $25 and below $10,000, and is either paid for and not received, or “materially” different from what was described by the seller. Consumers will be protected for as much as $250 with a $25 deduction. For those using direct payment, coverage goes up to $3,000, with a $25 deduction.

The protection does not apply to transactions in which bidder or seller has a negative rating, Yahoo said.

As for its shopping site, shoppers are protected free of charge for the full value of any item up to $750. Protection up to $1,000 is available to consumers who store their billing and shipping information on the site.