WASHINGTON Some 35 million U.S. Internet users participate in on-line auctions, but more than 40 percent of them reported fraud or other problems using the sites, according to a survey released this week.

The report by the National Consumers League (NCL) and Harris Interactive noted that on-line auctions offer benefits for both buyers and sellers, but that many buyers should beware.

"Most auction-goers are happy with their experiences and confident that they wont run into trouble," the report released Wednesday said, according to AFP.

"However, at NCLS Internet fraud watch, on-line auctions have consistently ranked as the top complaint since that category was added to the database in 1997. The average loss per victim in 2000 was 326 dollars. Auction victims often say that they never thought about the risks or how to protect themselves until it was too late."

The survey indicated that 41 percent of buyers have had problems, including: Receiving items much later than expected (20 percent), receiving items that were different than promised (11 percent), receiving damaged items (10 percent), and never receiving the items (10 percent).

More than half of the sellers (52 percent) said they had experienced problems with buyers, including: Late payments (34 percent), never receiving payments (27 percent), buyers changing their minds (20 percent), checks bouncing (five percent), and buyers using stolen credit cards (one percent). On-line auction site such as those offered by Ebay and Yahoo are among the Internet's most popular destinations.

The survey indicated that nearly one third of adults in the United States who go on-line have participated in them -- an estimated 35.6 million people.

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"The Internet opens a global marketplace to consumers, one in which they can find anything they are looking for and compare prices easily, no matter where they live," the report said.

"For sellers, it provides access to a greatly expanded pool of potential customers, and the low cost of access makes it easy for individuals as well as businesses to offer goods and services."

Nearly two-thirds of those who experienced problems were able to resolve the issues themselves, while others complained to other parties including consumer protection groups. The report said auction participants can get some protection by using credit cards or escrow services.