What Can You Do When Defrauded on eBay?

zeno_lee asks: "About 55 eBay buyers were defrauded by a single high volume ebay seller. I discovered all the victims by backtracking each transaction this guy had for the past month and contacting each one individually. Everyone lost between $400 to $1700 each. I then started an email group to organize action against him and to get our money back. This guy was particularly successful because he had positive feedback ratings before he decided to jump ship. " Systems like eBay are, as most have seen, extremely popular, but the one big shortcoming is that the system only works when buyers can trust the sellers. It's actions like this that break the system and if dishonest sellers can get away with fraud, auction sites will suffer. What options are there when consumers have been frauded on auction websites?

"Most of us followed the proper procedures. You wait 30 days to file a fraud claim on ebay. Then you have the option of getting $175 at most from eBay's insurance. It softens the blow, but for many it's not anywhere close to what they lost. Contacting local authorities hasn't accomplished anything nor has filing with the FBI. Many people who paid via PayPal did get a refund, but others paid via checks.

eBay has been one of the bright spots of the internet. As a NYSE listed company, you'd expect more to be done about helping customers. I hope this question comes as a warning to be more cautious on eBay or not to bid for items on ebay over $400 without escrow protection. I've learned my lesson not to do business with anyone who doesn't use paypal or billpoint. But regardless of what we learned, most of us feel helpless because eBay has not done more to get our money back. Any suggestions?"

Comments

I think I read a suggestion

[JoeShmoe]

I remember back a couple years ago when eBay frauds were big news...some article was suggesting that whenever possible involve the US Mail system. Have them mail you a quote, or mail payment information or such.

The thing about it is, mail fraud is a federal crime which much higher penalties than other forms of fraud (Internet fraud being generally unclassified). If you get ripped off online, you can try to complain to your local police, or the police in the criminal's jurisdiction (if you can find it) but you will probably get nothing.

In you involve the mail system, then the it becomes a federal issue that is tackled by the Office of the Postmaster General and/or the FBI?

Don't quote me on this, but it would be definitely something to ask your local post office about. If a seller is legit, they should have no problem putting some information on paper and mailing it to you, right?

Other than that...the other thing that was suggested is use a credit card. Paypal had a big fight with credit card agencies on whether people can dispute Paypal charges for fraudulent auctions, but I seem to remember that the courts came down on the side of consumers (yes they could dispute) forcing Paypal to get insurance.

Sorry I couldn't find a link, but maybe it helps narrow down your searching?

- JoeShmoe

Duh ... use escrow services.

[Dr. Zowie]

Escrow services like Tradenable (formerly i-escrow) and even Billpoint let you trust the largish corporation (which has much more incentive not to cut and run) instead of the seller. When buying anything over $100, I always use escrow. Sure it costs a couple of bucks more, and there's a tiny amount of added hassle (you have to go back to the web site to verify that the stuff arrived on time), but the security is great and the service really isn't very expensive.

On several occasions, shady-sounding individuals have backed out of auction deals with me, after I suggested using Tradenable. To me, that's the surest sign of a huckster and a good indication that escrow works.

Same problem from other direction: bad buyers.

[aussersterne]

What about all of the bad buyers?

I both buy and sell on eBay. I've stopped listing auctions with the BuyItNow! option because too many of my auctions have been ended when a brand new bidder (i.e. someone who joined eBay within the last couple of days) comes and uses BuyItNow! to end the auction, then disappears completely and is never heard from/never logs into eBay again. Negative feedback doesn't help in this case, because these bidders inevitably have a feedback of zero or at best one and don't care if they lose one point.

Even without BuyItNow, I've had a number of auctions close and then never heard from the high bidder again, forcing me to relist and costing me time and money. In the worst case, one of my auctions closed at just over $300, the buyer e-mailed me a simply said "I changed my mind I don't want it sorry" and when I left negative feedback saying so, I of course got the retaliatory "FRAUD! Took my money and never delivered!" feedback. Legal action got the feedback removed, but that cost me as well.

I think that eBay should require a bank account number as a pre-requisite for buying or bidding. You agree when you join that if you default on a bid or if you are accused by n people of fraud, your assets will be frozen until the situation can be resolved and those involved can get the money owed to them.

Do what I did...

[BoarderPhreak]

I reported him to the following agencies:

- United States Postal Service
- Internet Fraud Center
- FBI
- Discover Card
- Ebay
- Billpoint
- PayPal

This guy is currently wishing he never heard of me, with several charges levelled against him, including:

- Mail fraud
- Credit card fraud
- Grand larceny
- Plus the fact this was all interstate, making it worse.

I also tracked his ass down using every known resource on the Internet, and ended up with his home address, home phone, AERIAL PHOTOS OF HIS HOUSE and more...

Needless to say, my money has been safely returned and he's in a world of shit. Sorry, asshole.

USPS Postal Inspection Service is our friend.

[Multics]

I got whacked by a similar deal. 12 positive feedbacks and then wham, 6 of us were ripped off for HP laser printer parts. Thankfully, TWO of us paid by USPS.

Between the TWO who paid by USPS we crossed the felony fraud line for them. It took them about 2 months to find him (he skipped his address and skipped on his roommates too). Though all I got back was ebay insurance (so far), USPS PIS did find him and jail him. I've not heard if they'll go for recovering all of our money, but eBay was very friendly with the USPS setting up the case.

Moral: NEVER PAY BY ANY MEANS BUT USPS. People who only accept PayPal are likely to be trouble because they know that there can't be a USPS inspector knocking on their door if they exclude that mechanisim for payment.

-- Multics