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.