eBay fraud under scrutiny

It’s great to see eBay fraud finally hitting mainstream media headlines. This story on BBC News talks about how eBay can take months to get round to providing details of fraudsters to law enforcement authorities.

“It gets to the point where that is obstructive to our inquiry,” says Ruth Taylor, who heads the North Yorkshire Trading Standards special investigations unit. “If it takes up to two months, then it is eating in to a lot of time that we have to make prosecutions,” said

A Slashdot discussion around this article also brings up some illuminating points: “I used to work for eBay”, says a user named “Aussersterne“. “And they are very careful *not* to do much about fraud. Their position is that they are *just* a middleman that connects buyers to sellers. The rest is up to you. If you are defrauded, they want you to go to law enforcement, *not* to eBay.”

He continues: “They actively *do not* work to shut down fraudulent sellers or auctions, because to do so would be to assume liability, which is precisely what they don’t want to do.”

My own experience of fraud on eBay was buying a set of “official Singapore studio release” West Wing DVDs from a user named “Kissoii_DVD”. Of course, he had the full compliment of positive feedback from “very happy” customers. I paid close to the Australian retail price for the DVDs (sometimes I am happy just to use internet shopping for convenience because it means the products come to me rather than me having to fight my way through weekend swarms to a shopping mall).

When they arrived, they were a bad pirated copy… the DVDs had been compressed to fit onto 4.2GB discs (which had been pressed in a factory, but presumably mastered on DVD-R) and I had two copies of disc 1, and no disc 2. They came rattling around in a box in plastic slips rather than the proper packaging.

I contacted the seller who was adamant that they were official studio release, and played OK on his “Playstation2” (apparently ignoring the physical problem of having two copies of disc 1 and no disc 2).

I checked eBay’s fraud protection policy and discovered that I could get a refund up to $400, but they would extract a $25 administration fee. One of the pre-requisites to making a claim would also be that I would have to get a certificate of valuation from a qualified valuation professional in order to make the claim. I figured that even if I could find someone who could value DVDs, this would cost me at least another $30. Then I would have to pay the postage to the USA. So out of all that, I’d probably get about $20 back of the $70 I paid for the DVDs. It didn’t seem worth it.

Of course, the seller had registered with totally false details, so I couldn’t contact him directly. And while I could have taken the seller’s bank account details to a police station, I really doubted that the police would take any action over a $70 fraud online.

I decided to pursue eBay’s dispute resolution process to see if I could convince the seller to give me my money back. The back-and-forth process basically involved the seller being adamant that the goods weren’t pirated and me being adamant that they were. The ‘process’ ended up being closed by eBay because the seller stopped responding.

Of course, if I’d known about this stuff in advance I would have paid only by credit card directly or credit card through PayPal, where the seller bears all risk due to the fact that a buyer can get their card company to cancel the charge on their card until the seller proves to the bank that it was legitimate.

I still use eBay a lot, but I prefer to sell things on it, and I insist on direct bank transfer so there is no risk to me.

What eBay could do to shut down fraud

I have argued to eBay Australia’s media spokesman Daniel Feiler time and time again that eBay needs to have much more stringent checks and balances on who can open an account on eBay. My argument is that banks and telcos manage to do pretty thorough identity checks on people without putting up a huge barrier to ‘joining’. eBay could improve things a -lot- by working with governments in each country in which they operate to develop appropriate identity verification procedures.

In Australia, before allowing someone to sell goods online, eBay could use the same 100-point identification process used by banks, and it could outsource the physical checking of these IDs to Australia Post, which is how credit card companies with few physical shopfronts like Amex and Citibank do it.

It could also adopt the processes used by smart online retailers to verify identity: a phone call to a new account holder. For years, Coles Myer business Harris Technology wouldn’t accept direct payments online. It got much cheaper transaction rates from credit card companies because it kept its card fraud down to a bare minimum by calling every customer. It would go through the customer’s billing and delivery details on the phone, and get their credit card number then and put the transaction through on the spot.

In a best case scenario they would sniff something fishy on the phone call, or a fraudulent card would be declined. In the very worst case scenario, HT would at least have a valid phone number that they could give to police which could then be compared to the Telstra Integrated Public Number Database, the authoritative central database of Australian phone numbers. In eBay’s case, it would have the phone number, and it could also try putting through a 1c ‘joining fee’ on a customer’s credit card to ensure that they had a valid credit card that could also be used to match to a real person if things went belly-up.

And finally, eBay should stop its lame arguments that its internal research shows (unsurprisingly) that people much prefer to use email and online chat to talk to eBay when they have questions. One case I recently wrote up for APC involved one poor woman who discovered that her eBay account had been hijacked and some bottom-feeder had sold thousands of dollars worth of non-existent iPods on her account.

She caught the fraud while it was in progress, while auctions were still active, but had a hell of a time contacting eBay while US-based online ‘chat centre’ workers bounced her from department to department. I won’t relate the whole sorry tale here, but the response from eBay Australia was highly unsatisfactory: one would think that eBay Australia’s media spokesman had had a past career in the oil industry, such was the evasiveness of the response.

If banks can provide 24 hour fraud reporting call centres, and yet only charge a few dollars per month per bank account, why can’t eBay? At worst, it could do as every other company seems to be doing and outsource its call centres to a low labour cost country like India. It probably wouldn’t be the highest quality customer service experience, but it would be a damned sight better than forcing people who are panicked over fraud on their eBay account to try to connect to eBay’s rinky-dink online chat. One would hope eBay’s acquisition of Skype will see it introducing technology for customers to call eBay, not just between themselves.

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30 thoughts on “eBay fraud under scrutiny

  1. pumpkin.soup

    This article is an interesting parallel, to my personal ebay experiences. I think we all realise that laws and enforcement take time to catch up with new systems. However I would go as far to say that ebay now actively hides fraud on its site. It has a new practice of deleting a deregistered sellers recently completed finished auctions. The result is there is now no record of that fraud. More information available here http://www.thebaysidediner.com .

  2. pumpkin.soup

    This article is an interesting parallel, to my personal ebay experiences. I think we all realise that laws and enforcement take time to catch up with new systems. However I would go as far to say that ebay now actively hides fraud on its site. It has a new practice of deleting a deregistered sellers recently completed finished auctions. The result is there is now no record of that fraud. More information available here http://www.thebaysidediner.com .

  3. Aussie Guy

    eBay fraud is climbing and all the while eBay are failing to fix the problems. For example, at anytime of the day, listings numbering in the hundreds advertising the Nokia N91 cell phone are fleecing unsuspecting buyers of there money who are not aware that the Nokia N91 has not yet been released on the market.
    There are sellers who get high feed back scores by way of setting up multiple accounts and buy e-books off each of the seller accounts. Once a high feed back score is obtained, the seller then lists non-existant high price items. Takes the money and sends nothing. Reports to eBay to take action take up to a week, while in the mean time, that thief has “sold” hundreds of items netting as much as $100,000 or more before that account disappears. While reported to eBay, the seller just comes back with another account and repeats the process. Requests from eBay to help a victim results in eBay saying nothing more than, “click on the sellers profile for contact details”. Problem there is that the details are fake.
    Since eBay have apparently failed to assist in protecting consumers, sites like http://www.thebaysidediner.com have appeared to take action and give assistance where ebay fails terribly.

  4. Aussie Guy

    eBay fraud is climbing and all the while eBay are failing to fix the problems. For example, at anytime of the day, listings numbering in the hundreds advertising the Nokia N91 cell phone are fleecing unsuspecting buyers of there money who are not aware that the Nokia N91 has not yet been released on the market.
    There are sellers who get high feed back scores by way of setting up multiple accounts and buy e-books off each of the seller accounts. Once a high feed back score is obtained, the seller then lists non-existant high price items. Takes the money and sends nothing. Reports to eBay to take action take up to a week, while in the mean time, that thief has “sold” hundreds of items netting as much as $100,000 or more before that account disappears. While reported to eBay, the seller just comes back with another account and repeats the process. Requests from eBay to help a victim results in eBay saying nothing more than, “click on the sellers profile for contact details”. Problem there is that the details are fake.
    Since eBay have apparently failed to assist in protecting consumers, sites like http://www.thebaysidediner.com have appeared to take action and give assistance where ebay fails terribly.

  5. Elizabeth Pallett

    This was a great story, perhaps now would be a good time to do a follow up. I got caught out by one of the Ebay Power Sellers and surprise surprise, Ebay did nothing at all. I am about to go to the Victorian Police and am trying to do everything possible to shut this guy down ASAP. I also know the baysidediner very well, bad for me and many others that we only find out about them after we get into trouble.

    Email me if you want everything I have on at least one of the sellers all emails from him and ebay.

  6. Elizabeth Pallett

    This was a great story, perhaps now would be a good time to do a follow up. I got caught out by one of the Ebay Power Sellers and surprise surprise, Ebay did nothing at all. I am about to go to the Victorian Police and am trying to do everything possible to shut this guy down ASAP. I also know the baysidediner very well, bad for me and many others that we only find out about them after we get into trouble.

    Email me if you want everything I have on at least one of the sellers all emails from him and ebay.

  7. Steve Wallace

    Ebay will not answer my emails of a valid complaint of a fraudulant seller.

    I have emailed 6 times without reply over the last 10 days.

    I think ebay is out of control and I hope you can persure these guys to behave

    Regards

    Steve Wallace

  8. Steve Wallace

    Ebay will not answer my emails of a valid complaint of a fraudulant seller.

    I have emailed 6 times without reply over the last 10 days.

    I think ebay is out of control and I hope you can persure these guys to behave

    Regards

    Steve Wallace

  9. S.Devonport

    You failed to mention that members can be kicked off Ebay for trying to warn other Ebayers about any scams they come across, no matter how blatantly obvious they are.
    Eviction can also occur if a member actually mentions anything about another member being kicked off.

    Another interesting habit of Ebay is warning you of a possible scam taking place a week after the auction has finished and you’ve already paid for the item.

    I do wish there was some competition with the on-line auction industry in Australia. Maybe Ebay would start pulling it’s socks up. At the moment they have us by the short and curlies and if we complain they start with the threats and intimidation. Mind you there used to be competition with a company called SOLD. But they were bought out, and guess who did that ???? EBAY

  10. S.Devonport

    You failed to mention that members can be kicked off Ebay for trying to warn other Ebayers about any scams they come across, no matter how blatantly obvious they are.
    Eviction can also occur if a member actually mentions anything about another member being kicked off.

    Another interesting habit of Ebay is warning you of a possible scam taking place a week after the auction has finished and you’ve already paid for the item.

    I do wish there was some competition with the on-line auction industry in Australia. Maybe Ebay would start pulling it’s socks up. At the moment they have us by the short and curlies and if we complain they start with the threats and intimidation. Mind you there used to be competition with a company called SOLD. But they were bought out, and guess who did that ???? EBAY

  11. Chris Malan

    To cut a long story short, EBay should be closed down. In my case they actively helped a fraudulent seller by doing nothing about him. Nearly 20 e-mails between Ebay and me and in not one of them did they deny that the fraud actually took place or ask me for more than I gave them to verify the fraud. I still have them all. The NSW police investigated the case, decided that there was no doubt that fraud was committed, and then permanently shelved the case, even though they knew how many problems there have been with this seller. Follow this link:
    http://toolhaus.org/cgi-bin/negs?User=jonesco&Dirn=Received+by&Many=ON

    If you buy on EBay you are on your own. EBay won’t help you, the NSW police don’t want to know, the seller is anonymous or nearly so, meaning you cannot give his address to any agency to collect what he has defrauded you of.

    This may sound harsh, but I have all the documented facts to back me up.

    Stay away from EBay. When you get stung you will have nowhere to turn to.

  12. Chris Malan

    To cut a long story short, EBay should be closed down. In my case they actively helped a fraudulent seller by doing nothing about him. Nearly 20 e-mails between Ebay and me and in not one of them did they deny that the fraud actually took place or ask me for more than I gave them to verify the fraud. I still have them all. The NSW police investigated the case, decided that there was no doubt that fraud was committed, and then permanently shelved the case, even though they knew how many problems there have been with this seller. Follow this link:
    http://toolhaus.org/cgi-bin/negs?User=jonesco&Dirn=Received+by&Many=ON

    If you buy on EBay you are on your own. EBay won’t help you, the NSW police don’t want to know, the seller is anonymous or nearly so, meaning you cannot give his address to any agency to collect what he has defrauded you of.

    This may sound harsh, but I have all the documented facts to back me up.

    Stay away from EBay. When you get stung you will have nowhere to turn to.

  13. 2Shane

    Ebay??? I bought something on ebay, the seller said I could pay by direct deposit, then he changed his mind after I had bought the item.

    I try to pay and the seller starts insisting on paying via cash in the mail or western union.

    I notify ebay, they do nothing except embroil me in mutiple emails from mutiple departments – that go no where.

    A week later, the seller puts up a no pay complaint.

    The same crap ensues.

    The Seller still keeps on insisting that I pay in cash.. Ebay does nothing about him, just more ebay staff formula email wars…

    The seller then gets my number off my contact details..

    Since I am not an especially social person, and I have always figured that if they really want to talk to me they can always email me, and so I change my phone number in my ebay account.

    The stupid people in ebay’s admin then start to hassle the crap out of me for changing my number to an openly bogus “non contact” number….

    They start hassling me to change it back (in my contact information) and resupply all my details…

    I really don’t give much of a toss for them any more, and so I tell them that if they want to change it, to change it back to the original.. and I even resupply it 3 times…

    They can’t and won’t do it.

    They then suspend my account….

    Then they start to hassle me to contact me on the number… I tell them to email me to make a time at least 48 hours in advance… they won’t do that, cause they seem to think that I am supposed to be sitting home alone just for them.. at their beck and call.

    As my phone line is used mainly for internet, they start to hassle me to get a new phone line…..

    I tell them to basically go stuff themselves – cause it’s my phone line and I can do what ever I want with it, for however long I want to do for, when ever I want to do it.

    I one of the rare moments that I am off line, some guy from ebay admin calls me, to “verify the legitimacy of my contact number”…..

    Then my account is unsuspended… cause my number (oh shit for brains) is actually real.

    But then they follow this up with another email saying I have to change the “verified” number back to what it was on my account.

    I tell them that if they are so freaking excited about the whole issue, that they can go do it themselves.

    A few days later.. another ebay formula email, not from ebay Australia, it’s from EBAY INTERNATIONAL AG.. telling me my account is suspended for fraudulent activity (the changed phone number)

    I have had HUGE fights with every department in ebay, from paypal, square trade, ebay all around the world.. etc…

    My final concensus:

    You may occasionally find a good deal on ebay.

    It may be a good source of collectables etc..

    But when the time = money equation is factored into it, and the amount of grief you have to bear from these idiots that are in eBay administration, then stuff them, I’d rather go to the shops.

  14. 2Shane

    Ebay??? I bought something on ebay, the seller said I could pay by direct deposit, then he changed his mind after I had bought the item.

    I try to pay and the seller starts insisting on paying via cash in the mail or western union.

    I notify ebay, they do nothing except embroil me in mutiple emails from mutiple departments – that go no where.

    A week later, the seller puts up a no pay complaint.

    The same crap ensues.

    The Seller still keeps on insisting that I pay in cash.. Ebay does nothing about him, just more ebay staff formula email wars…

    The seller then gets my number off my contact details..

    Since I am not an especially social person, and I have always figured that if they really want to talk to me they can always email me, and so I change my phone number in my ebay account.

    The stupid people in ebay’s admin then start to hassle the crap out of me for changing my number to an openly bogus “non contact” number….

    They start hassling me to change it back (in my contact information) and resupply all my details…

    I really don’t give much of a toss for them any more, and so I tell them that if they want to change it, to change it back to the original.. and I even resupply it 3 times…

    They can’t and won’t do it.

    They then suspend my account….

    Then they start to hassle me to contact me on the number… I tell them to email me to make a time at least 48 hours in advance… they won’t do that, cause they seem to think that I am supposed to be sitting home alone just for them.. at their beck and call.

    As my phone line is used mainly for internet, they start to hassle me to get a new phone line…..

    I tell them to basically go stuff themselves – cause it’s my phone line and I can do what ever I want with it, for however long I want to do for, when ever I want to do it.

    I one of the rare moments that I am off line, some guy from ebay admin calls me, to “verify the legitimacy of my contact number”…..

    Then my account is unsuspended… cause my number (oh shit for brains) is actually real.

    But then they follow this up with another email saying I have to change the “verified” number back to what it was on my account.

    I tell them that if they are so freaking excited about the whole issue, that they can go do it themselves.

    A few days later.. another ebay formula email, not from ebay Australia, it’s from EBAY INTERNATIONAL AG.. telling me my account is suspended for fraudulent activity (the changed phone number)

    I have had HUGE fights with every department in ebay, from paypal, square trade, ebay all around the world.. etc…

    My final concensus:

    You may occasionally find a good deal on ebay.

    It may be a good source of collectables etc..

    But when the time = money equation is factored into it, and the amount of grief you have to bear from these idiots that are in eBay administration, then stuff them, I’d rather go to the shops.

  15. Chris Malan

    [This post has been edited by Dan Warne to mitigate risk of subjudace and defamation]

    In mid Sept I bought an LCD monitor from a user on EBay. The user  denied receipt of the cheque, but it was traced to a bank account. I have documentary evidence that this is the same person as the one from the company that sold me the monitor. He still denied receipt of the cheque and reported me as a non-payer.

    I have about 20 e-mails from EBay. In short, according to them, this user is fine. Toolhaus reports hundreds of negative feedbacks for this user to date.

    There’s also a report at the Bayside Diner under proven bad sellers.
    The matter was reported to the police in December. I eventually had to contact the minister of police, Carl Scully, to get some action. He had his office write to me. A Detective then got warrants for the bank and EBay. According to him the eBay user was guilty without question. I saw the entry for the payment into his bank account.

    A Sergeant then phoned me and said they were shelving the case permanently as the amount was modest, less than $300, and they had some shootings to occupy them.

    The last communication from Carl Scully’s office was on 13/4/2006. They were still looking into the matter.

    EBay, and any shyster using their services, can do what they want to. In the case of EBay it seems the public watch-dogs are like toothless chihuahuas.

    Exposure, like on the Bayside Diner, does nothing. You may recall the Paul Simon song with the words, “still standing after all these years.” Jonesco is “still trading after all these years.” That despite numerous complaints to EBay and a police investigation which showed he commited fraud beyond any shadow of a doubt.

    What more can one do?

  16. Chris Malan

    [This post has been edited by Dan Warne to mitigate risk of subjudace and defamation]

    In mid Sept I bought an LCD monitor from a user on EBay. The user  denied receipt of the cheque, but it was traced to a bank account. I have documentary evidence that this is the same person as the one from the company that sold me the monitor. He still denied receipt of the cheque and reported me as a non-payer.

    I have about 20 e-mails from EBay. In short, according to them, this user is fine. Toolhaus reports hundreds of negative feedbacks for this user to date.

    There’s also a report at the Bayside Diner under proven bad sellers.
    The matter was reported to the police in December. I eventually had to contact the minister of police, Carl Scully, to get some action. He had his office write to me. A Detective then got warrants for the bank and EBay. According to him the eBay user was guilty without question. I saw the entry for the payment into his bank account.

    A Sergeant then phoned me and said they were shelving the case permanently as the amount was modest, less than $300, and they had some shootings to occupy them.

    The last communication from Carl Scully’s office was on 13/4/2006. They were still looking into the matter.

    EBay, and any shyster using their services, can do what they want to. In the case of EBay it seems the public watch-dogs are like toothless chihuahuas.

    Exposure, like on the Bayside Diner, does nothing. You may recall the Paul Simon song with the words, “still standing after all these years.” Jonesco is “still trading after all these years.” That despite numerous complaints to EBay and a police investigation which showed he commited fraud beyond any shadow of a doubt.

    What more can one do?

  17. Genie

    Take a peak at REAL TIME FRAUDULENT AUCTIONS on eBay right now!

    I have been watching eBay fraud for a year now and reported thousands of scam auctions to eBay safe harbor dept… I am just dissappointed that after all these years I can find eBay fraud auctions by hundreds every day with a minimum effort and am just pondering what is the Security Dept at eBay doing:

    just look at

    http://www.companyexposed.com

    It took few minutes to pull up sampling of real time fraud auctions ailing eBay right now

    (I do not know how long I will be able to keep this code up or current as it relies on some daily updates on my part, so if you do not get any results, I am probably busy in my dayjob 🙂

  18. Genie

    Take a peak at REAL TIME FRAUDULENT AUCTIONS on eBay right now!

    I have been watching eBay fraud for a year now and reported thousands of scam auctions to eBay safe harbor dept… I am just dissappointed that after all these years I can find eBay fraud auctions by hundreds every day with a minimum effort and am just pondering what is the Security Dept at eBay doing:

    just look at

    http://www.companyexposed.com

    It took few minutes to pull up sampling of real time fraud auctions ailing eBay right now

    (I do not know how long I will be able to keep this code up or current as it relies on some daily updates on my part, so if you do not get any results, I am probably busy in my dayjob 🙂

  19. Flyt3d3ck

    Got caught by an Ebay scam 2 weeks ago. Paid $385 for a phone. Seller asked to provide details of shipment, he never did. Complained to Ebay, they said to open a dispute. Left negative feedback for seller and a lot of other victims of the scam started contacting me. Ebay finally suspends sellers account. ebay tells me my dispute escalated to a claim. They have the hide to tell me i selected cash for the payment type, but i n my email from checkout it clearly states bank deposit. I think Ebay is more interested in protecting the scammer and not the buyer – well it feels that way anyway to me as even though 70 odd people Australia wide have been affected by this scam, Ebay has provided very little support to any of the victims. All we get is “automated responses”. In my opinion, Ebay is a trashy company.

  20. Flyt3d3ck

    Got caught by an Ebay scam 2 weeks ago. Paid $385 for a phone. Seller asked to provide details of shipment, he never did. Complained to Ebay, they said to open a dispute. Left negative feedback for seller and a lot of other victims of the scam started contacting me. Ebay finally suspends sellers account. ebay tells me my dispute escalated to a claim. They have the hide to tell me i selected cash for the payment type, but i n my email from checkout it clearly states bank deposit. I think Ebay is more interested in protecting the scammer and not the buyer – well it feels that way anyway to me as even though 70 odd people Australia wide have been affected by this scam, Ebay has provided very little support to any of the victims. All we get is “automated responses”. In my opinion, Ebay is a trashy company.

  21. Heather W

    Well I have just been ripped off for $2300 by a lowlife in Sydney and have found out that the seller did it to someone else.
    You are all right in saying that Ebay doesnt give a damn, the NSW and Vic Police seem to be taking forever to do anything, and I have lost all confidence in buying anything over the internet.
    Its a pretty shitty way of learning a lesson.

  22. Heather W

    Well I have just been ripped off for $2300 by a lowlife in Sydney and have found out that the seller did it to someone else.
    You are all right in saying that Ebay doesnt give a damn, the NSW and Vic Police seem to be taking forever to do anything, and I have lost all confidence in buying anything over the internet.
    Its a pretty shitty way of learning a lesson.

  23. Dalveen

    Yep I got ripped off $1500 by the wicked witch of Mitcham. It certainly appears that E-bay are more interested in looking after the seller rather than the buyer.

  24. Dalveen

    Yep I got ripped off $1500 by the wicked witch of Mitcham. It certainly appears that E-bay are more interested in looking after the seller rather than the buyer.

  25. Prefermetal

    I have used the eBay resolution path equally with totally useless results – One comment was that the buyer may not actually notice any effect on the wrath shown to the seller!
    In other worde they probably won't do a thing.
    I am amazed that now there is true people power, ie the INTERNET, there is not a 'Blackbook" od any company that treats is customers badly. And anyone can got o the site to see how they perform. When it gets well known companies will be forced to change there ways or go bust. In this column there are a lot of anti-eBay comments. So Mr Warne, are you going to take on the job of a life-time? Bing an old git – its too late for me..
    prefermetal.

  26. Prefermetal

    I have used the eBay resolution path equally with totally useless results – One comment was that the buyer may not actually notice any effect on the wrath shown to the seller!
    In other worde they probably won't do a thing.
    I am amazed that now there is true people power, ie the INTERNET, there is not a 'Blackbook" od any company that treats is customers badly. And anyone can got o the site to see how they perform. When it gets well known companies will be forced to change there ways or go bust. In this column there are a lot of anti-eBay comments. So Mr Warne, are you going to take on the job of a life-time? Bing an old git – its too late for me..
    prefermetal.

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