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eBay Slammed Over Levels of Fraud
Dynamoo writes "The BBC is reporting that companies and law enforcement agencies are becoming increasing frustrated and concerned at the high amount of fraud at eBay. There are reports that it can take two months for eBay to pass details to fraud investigators, and that even for companies with a 'special relationship' with eBay it can take 5 days for fraudulent auctions to be shut down. From the article: 'With all the amount of profits that eBay makes, then there is ample scope for additional staff. Frankly, it is totally unsatisfactory.'"
With the fees eBay charges, and with little or no crack down by government, why should eBay care? Between their listing fees, closing fees, and the unprecedented fees they collect on the resulting financial transactions through Paypal, it's in their best interest to continue allowing frauds to operate. eBay doesn't care about abuse until the frauds stop paying them; only then do accounts get cancelled and investigations are launched.
I'm sure there will be a ton of stories posted here about individual instances of fraud. Personally, I have never been seriously ripped off, but I have definitely purchased from some shady sellers who have clearly misrepresented their products. I don't buy from eBay anymore, but I am a seller, and an honest seller, so I feel I'm at least doing my part.
I was just scammed out of $70 or so buying some DVDs. No big deal, really (I don't buy really expensive stuff on ebay), but it was frustrating to see eBay do absolutely nothing. This particular seller had multiple ebay accounts, multiple email addresses, and multiple paypal accounts. They switch from account to account and close accounts as they get negative feedback. Fortunately, I used PayPal. I know paypal doesn't have a good reputation around here, but they are actually getting me my money back, and took action right away, unlike ebay (paypal is owned by ebay now, but they still operate independently).
--- witty signature
My own experience is that they avoid doing anything about fraudulent sellers. They make it almost impossible for buyers to turn in complaints and their arbitration option is toothless. So is Square Trade, by the way. If you do manage to thread your way through the maze of links to actually turn in a complaint, it gets ignored or brushed aside. I love ebay for small purchases, but I never bid an amount I'm not willing to lose.
There are loads of auctions there which are obviously pirated games - you know, things like "5000 PSP games on one DVD, these games are public domain, honest". Even when these get reported to eBay they do nothing about it, because they make money off of the illegal stuff and the fraud just as much as they do on the legit stuff. And no-one really presses them on it.
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I do think it's the consumer's responsibility ultimately, but just pointing out that eBay has incentive to drag their feet.
I'd be interested to see stats on the number of auctions that close every day vs. the number of auctions that are shut down or that turn out to be fraudulent. It seems, from the news coverage at least, that it's getting worse, but they're constantly getting bigger, so perhaps it's not.
There's no reason to report a successful, legal, pleasant experience on eBay, but people love to read about how others got ripped off. And those that get ripped off complain louder than those who have not will 'advertise' their non-fraudulent experience...
-bs
That that is is not that that is not. That that is not is not that that is.
The feedback system is flawed. A friend was caught like this.
The seller opened a small store, and sold small figurines at low cost for months. His feedback was in the 90's. Then the holidays roll arround, and suddenly he is selling exclusive, hard to find, big ticket items. If you look at his feedback, he was great. Of course, this guy took all the cash and ran.
My friend lost $1500 for some one of a kind trinket. I would rather pay a few bucks, and be sure of the seller. Only small items for me from now on with Ebay.
Save a Life. Donate Blood. Please.
I had a fun time with an e-bay auction. I won an auction for a collection of hard drives. Nothing listed in the auction said anything more than "used hard drives". Turns out that earlier "winners" received IBM disposed HDs, meaning they were completely useless. A large group of people were defrauded over a period of months. All complaints to Ebay went unanswered. However, being geeks etc, this large group of people started corresponding, bringing together evidence of a systematic mail fraud in action. The parent corporation of this particular company was notified in a chance to make right before legal actions would be taken. (Seems mail fraud above a certain dollar amount gets the fed's attention, as it was across state lines:) So the parent shut down the fraudster, and made good on all purchases.
The bad part about this supposedly happy ending? The last 5-8 people were notified by this group in time to not pay. I was one of those. I got a "bad rating" from the fraudster, and this is still on my ebay account to this day.
Ebay not only does not respond to fraud, it does not care about its customers because it doesn't allow corrections of feedback (not that it really matters) under any circumstances. Well, I believe they do now, but guess what - feedback from closed accounts should be dropped. It's not.
The easy solution is to only use ebay for specific items, and make sure if the $ amount is high (more than $100-$200, get personal contact info and deal with the individual directly. CC's are also useful. Having a phone number really helps, as you can do some due diligence before completing your buy.
On the whole, this approach has worked for me post that one incident, and the people I've dealt with have been good people overall. Just remember, if it looks too good to be true, it is. Even on Ebay.
The cesspool just got a check and balance.
I caved in since I knew from other sellers experiences that would never get my 100% positive feedback back. Now I use registered express mail for all my auctions to avoid simular experiences in the future.
It seems that criminal scum gravitate to areas of the internet where anonimity and laxx administrative controls are in high supply.
When the fraud has a sufficient effect on profit they'll change. The reason they haven't is any fraud reduction measure will cost more than it makes.
Ebay has 2 things going for it.
The number of people in the ebay network.
They're good enough with no singificantly better competitor in their key market.
Serously though,
Whatever happened to consumer responsibility? I personally never buy anything unless the price is pretty low and the seller has lots of feedback. Our society has become so dependent on the government and law enforcement to take care of our problems that we have been totally ignorant of how to protect ourselves. If eBay gains enough of a reputation for fraud, people will stop shopping there and they will loose enough business that they will have to do something.
Regarding hijacked accounts, why don't places like Ebay implement two-factor authentication? IMO it would cut down drastically on the amount of fraudulent auctions, and it might even put a dent in the number of shill bidders.
It may suck to be a victim of fraud, but it's not because of the money - it's the fact that someone used a system to outsmart you, and got rewarded for it.
If you want the government to care about it and handle it for you, go shop at the mall, where you pay a sales tax for them to do so. This is why you can return things because you don't like them, and you can abuse retailers ridiculously just to have them offset what you cost them in the price of the things they sell you.
It would be nice if everyone played fair when it comes to making money, but they don't.
How responsible should ebay be for fraud. Well lets see. Their main responsibility is profits. If they didicate some of ther staff to persuing fraud, that will affect their bottom line negatively. If the staff they allocate to persue fraud does a good job eliminating faud, they will lose money again because of the loss of fradulent business. Thus illustrating that if eBay effectively tackles fraud, it will be a lose/lose proposition for them. Now, considering that eBay has no moral obligation to anyone, why should eBay be compelled to do anything about this?
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Don't ship abroad - at least not to 'certain countries' in Africa.
This is crap. If you are the seller, you have the advantage. You have every ability to ensure that the payment you recieve is genuine before you ship the item, so there is literally *nothing to lose* from shipping abroad. The only excuse you could have for not shipping abroad is laziness because you don't want to fill out the extra customs declaration.
Don't accept moneyorders, WU, MG or the like - card is king, and PayPal (while evil) is also decent.
Definitly don't accept a deal going like I'll send you a check on a higher amouth, you send me the item and the money left over. The check WILL be false.
See my above comment. There is nothing wrong with accepting money orders or cheques. Just make sure you wait until they clear at your bank before you ship the item. Anyone who sent a legitimate payment will understand this, and it only takes 3-5 days.
If the transaction goes sour, there is no problem re-listing the item for free. It has happened to me a couple of times in the past (not fraudulent payment, just no payment at all), and eBay was very easy to deal with.
There is ample reason to be suspect of *buying* overseas, but rarely is there a good reason for not *selling8 overseas. All you are doing is needlessly constricting your customer base.
...to police fraud on its auctions, when they have to bear the costs of the fraud.
Those costs will come in the form of greater governmental regulation, or people not using the service.
... that it was a scam?
Surely you don't think that *nothing* is *ever* lost during transit?
It happens all the freaking time, this is why shipping insurance exists. Nearly ever hand that touches your package on route from source to destination is making a below-average salary. Wouldn't you be tempted to swipe that laptop-sized box once in awhile? After all, you *know* it is insured, so it is a victimless crime, right?
Now, maybe you do know for sure you were scammed somehow, but if you don't, I wouldn't be so quick to blame the buyer.
Nothing listed in the auction said anything more than "used hard drives".
I really don't see a problem here-- used hard drives is exactly what you (almost) got.
Tsunami -- You can't bring a good wave down!
Wow. Listen, I grew up on a farm working in the sun all day, picking rock and bailing hay.
... hell, I remember arc wielding without a shield. Not very bright but sometimes you don't have $180 to blow on glasses that protect my "pretty little eyes" from the sun.
Do you think I cared about "UV" protection for my eyes? I didn't
Oh, one more thing, I don't think eBay was sending me that late e-mail out of concern for my eyes. It looked to be a petty token of compliance between them and Oakley.
My work here is dung.
Paying $1500 to a stranger on the internet without at least clicking on past sold items and checking out their prices is not very smart, IMHO. You have to use your head on eBay and elsewhere, or you will get ripped off.
Tsunami -- You can't bring a good wave down!
First, my experience:
I've noticed the amount of emails targetting paypal and ebay to grab accounts and then to list very expensive items at a "deal" price. I was in the market for a L-series lens for my canon camera (read: expensive 1500+$) and I've noticed there was a 600mm fixed high quality lens for 900$ buy it now. Now this specific lens retails between 3000 and 5000 used, and unless it's seriously damaged, it wouldn't go down to that price. So I've sent an email to the guy, and the response left me puzzled, so I did a wide search for the serial number of the lens he posted, to find out that there were 10 listings from 5 different users with the SAME auction, using the exact same description, they've all listed their items with all the bell and whistles (gallery, bold, etc). When you see something like that, it becomes quite obvious that it's fraud. Some could argue that the listings are always copied from one to another when the item sells well, I agree, but if you get a hit on specifics like a serial number, or everyone selling the same price, or the person accepting only western union, c'mon... oh, and there's no such deal as getting a popular item at 1/5th of the price, if you see that there is no one jumping on it, you should look elsewhere. Also, for expensive items, make sure that you can reach by voice the person that you are buying from, make sure you can track him down.
For more advanced users, Save the emails, in the header you can get the originating IP. If you're buying from someone listed in USA or Canada, and you see romania in the header packets (use something like www.whois.sc/###.###.###.###), well you have your answer.
Finally, if you see a user with 40 feedback and search for "other listings from this user" and see 15 items of 1000$+ listed with all the features turned on, get suspicious, again, a mix of suspicious conditions and good judgement will make your transaction aborted or safe.
What ebay should add is a flag that signed in members with 98%+ feedback could click for suspicious listings, when ebay gets a X number of hits on a specific auction, they could review/investigate it. You can't ask ebay to look into every single auctions, this would be insane and cost-prohibitive and it's already expensive enough as is; they would pass the cost on the users for sure so you don't want that. But better cooperation with authority and a simple system like this would reduce potential frauds drastically. The ideal would be 0 frauds, but this is utopia, on such a big system, with hacked accounts of good ebayers, it makes the process much harder. What is needed now is to cut down 90% of the frauds, and they are obvious to track and shut down.
--- Metamoderating abusive downgraders since my 300th post.
In the future, if someone's selling something for $1,500 less than retail, you can be pretty sure something's up.
I don't know if this is you, but some people are so obsessed with finding deals that they'll put significant cash on the line for something as iffy as an Ebay item. And in my experience these savings aren't so great. I sold a year-old projector (with original lamp) on Ebay for about $100 less than they could have bought one new. And there were a bunch of bids. Every time I have something to sell, I get almost what I paid for it. It's shocking how much people will front to someone they've never met for something they've never seen, with only an email address or Ebay account as proof of identity.
These ratings systems of theirs don't seem to make a difference; I so seldom put items up for sale that I've gone through a handful of accounts and each sale pretty much stands on its own. I've found there's a way around that. As long as I start the bidding low, someone will pounce on it, not able to help themselves, and soon that bid will encourage more bids, etc. You can see why that place is such a haven for con artists.
Greed is good. For Ebay sellers.
The market doesn't always pick the technically best solution.
They pick the best solution for the current situation.
MS Windows & Office is currently leading because it works well enough, and it isn't worth the trouble of switching, in the opinion of those making the decisions.
you are at a mall and have a choice between 2 stores. Store #1 has a security guard posted at the door, you look inside and see a customer service department that is fully staffed. The merchandise is clean and orderly.
Store two's front door is held open by a brick. Some dude is selling watches from the inside of his jacket at the entrance. You look inside and see a telephone with a "customer support" sign over it. Hundreds of greasy looking dudes are selling things -- their merchandise resting on recycled boxes.
Now ask yourself-- is ebay more like store number one or store number 2?
It's called escrow, and there are companies doing it. I believe eBay purchased on of the online escrow companies a couplfe years ago. There are, of course, fees involved. But if you are doing a significant transaction it is well worth it.
That is because the more they do, the more they "sort of" admit that they are - at least partially - responsible for the problem. Ebay would like to be very much like Kazaa and Napster in their arguments of "they're using the software we provide, but we can't be responsible for what they do with it." The more Ebay takes on fraud, the more they put themselves out as the police on the site, and they're not willing to accept that responsibility.
Excuse my speling.
Making The Bar Project
... that eBay does do quite a bit internally to find these things. I still don't quite get why people haven't grasped the concept that eBay is just a very fancy classifieds ad section, NOT an auction house.
If I was roaming the streets of Beijing, would I give my credit card to a street trader selling copied DVDs?
Do I really want to transfer money to an IBAN account in Yugoslavia?
I'll give you an example. Xbox 360s just came to market, although people were selling them well before the release date. You can of course do this, internally I can't tell if John Doe owns a small video game store, or has a brother who works in Microsoft. The policy is you have 30 days to come up with the goods. Beyond that, it's fraud. This policy is fair, it gives sellers the opportunity to sell and buyers the opportunity to buy. The problem is that the one guy who's doing this honestly is copied by twenty-nine who don't. The problem is this. What right to eBay have to make a prejudgment on the integrity of it's user base. I mean, apart from the fact that eBay is in a constant battle between creating true free markets, morality, and legality.
I personally worked on cleaning up the UK site from Chinese MP3 sellers. These guys owed us a lot of money; I'm talking nearly £500k. I was with the company 5 months and my actions were going to cost eBay a lot of money. What did eBay do? The created even tougher policies and implement new rules. The result? Difficult. The group of Chinese sellers got warehouses in the UK, and just walk the line again, without doubt they'll keep pushing it until we push back.
eBay's a victim of it's own success, and I'm of the firm belief that eBay takes a protective stance for an intelligent, trustworthy and capable user. Use of PayPal gives you a second layer of protection behind your credit card.
eBay's biggest error? The belief that people are basically good.
PS. No more cash, Western Union, Moneygram, Stormpay or instant cash transfers are allowed on the site, so hopefully whatever payment solution you use will give you the cover you need. My number 1 tip? eBay is not Amazon, you're dealing with another person, not a commercial entity, so if it looks dodgy, dodge it.
There are a number of things that are particularly prone to fraud on eBay. The most common are laptops and cameras, followed closely by cellphones and cellphone accessories. Unfortunately, the particular genre I have chosen (musical instruments) is also full of fraud (and borderline ripoffs). No way I would buy a laptop on eBay, if for no other reason than most commodity items are not really suitable for the eBay auction format anyway.
BTW, there is already an eBay-killer lurking in the wings. It's Froogle. Froogle hasn't really hit it's stride yet, but the Froogle business model has some significant advantages over eBay -- and is inherently superior for about 90% of the stuff you find on eBay now. The eBay auction format is well-suited for one-of-a-kind items with high personal value-add, and little else.
In addition, eBay doesn't scale worth a damn. In order to get twice the sales, you have to work at least twice as hard (assuming you are actually an honest seller). I have recently scaled my auctions way back (from 90+ active auctions to fewer than 20), and watched my sell-through percentage more than triple, and my workload cut by 90%. For a net reduction in eBay-linked profit of about 40%. I consider that a pretty clear indicator that I really need to change my approach to de-emphasize eBay.
eBay *does* have other competition besides Froogle. One of my favorites is Blujay, which is mainly a fixed-price aggregator listing/classifieds service. Blujay.com has grown large enough to show up on the watchlist at PowerSellersUnite.com (a forum of mostly disgruntled ebay sellers). Blujay.com also leverages listings with Froogle, which has definitely helped their traffic. I sell about 1/10 as much stuff through Blujay.com as I do on eBay, and it accounts for more than 1/4 of my profits -- or it did until this month (I just made a large volume sale to a school directly, without eBay or PayPal), mainly because the cost of selling there is much lower.
Craig's List was also a viable alternative, but since they have sold out to eBay, I expect that to change.
Unfortunately, in the Internet world, there is a strong tendency for the market leader to completely dominate, and #2 is way down in the noise. The #1 position can change, however... If GooglePay ever becomes reality, eBay and PayPal are going to be in serious trouble.
For now, eBay is still the place to get some real bargains -- if you are careful. That's because the typical eBay seller has no clue what her/his actual costs are, and is often selling at a loss. The vast majority of eBay sellers last about 6-9 months before the clue-stick smites them in the form of running out of money. Just stay away from the really huge ripoff-potential items like laptops and consumer electronics sold at ridiculous prices by people you have never heard of. And do some research on what you are buying; in particular, don't get in a hurry and skim through the auction description, and take some time to read the negs and neutrals in the feedback log. Check out the history of the seller. Use PayPal if you can't use a credit card directly. Don't even look at auctions with private bid lists or one-day limits (the one-day auctions with private bidders and private feedback are roughly 100% fraudulent, and there is no way that eBay can be unaware of this).
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"or I'll leave you with negative feedback!"
Actually, that's a good point. As much as you may want to leave negative feedback, you know that you'll almost always get the same in return from a vindictive, disreputable seller.
I learned long ago that on eBay, your positive feedback rating is *only* worth worrying about in a general, overall sense. The more items you sell, the more "immune" you become to the jerks who leave you negative comments without a valid reason.
One of my former bosses was very concened about keeping 100% positive feedback on eBay, because his eBay seller ID was his business name, and he really wanted his feedback to reflect his business in a good light. Because of that, he got completely screwed over by several people he bought and sold things from. (EG. One guy sold him what he claimed was a 1GB stick of SDRAM memory, but after exhaustively testing it in all the motherboards we had available to us, were never able to get it to be recognized in any machines as more than 512MB. Of course, the seller insisted it was our fault because we simply "didn't have one of the systems that was able to see all of the memory". But no... After a close enough inspection and looking up the part numbers stamped on the individual chips making up the DIMM, it was obvious it really was only a 512MB stick. Upon trying to return it, my boss was threatened with "If I accept this for return, I'm leaving negative feedback for you, but if you keep it and accept that it's your problem - I'll leave you a positive.")
On my own account, I've always just "stood up" to these individuals, and gladly accepted whatever negative feedback they wish to give me. I, in turn, always reply to it with a comment that attempts to counter their arguments. And despite all this, I've always managed to keep at least a 93-97 percent positive rating. The fact is, if you use it fairly regularly, the number of good, honest people still outweighs the bad (assuming you use a little common sense when buying and selling too!), so you'll turn out ok, feedback-wise.
Unless otherwise specified it's reasonable to assume that they are working.
However unlike Kazaa and the service formerly known as Napster, they charge money for every transaction going on under their noses, thus rather ruining their argument.
To break out the metaphors;
If i own a nightclub, and charge people for admittance, and some of those people sell drugs and stolen goods, I have the defence that i didn't know they were doing that sort of thing on my property, they were supposed just to be coming to dance.
If however I'm taking a payback on every drug deal and dodgy sale, my defence of ignorance is shot to hell!
A better question is: why do you continue to use PayPal? I've had a deep-seated distrust of them ever since the account-freezing issues. Apparently not too many other people cared about the lack of accountability and customer service.
If you like their business practices then by all means continue to use them. Personally, if PayPal (IMHO illegally) denied me a $900 payment I would never even consider using them again. But that's just me.
If the g'vt kept the data on you that google does you'd better believe you'd be calling it "doing evil"
If i own a nightclub, and charge people for admittance, and some of those people sell drugs and stolen goods, I have the defence that i didn't know they were doing that sort of thing on my property, they were supposed just to be coming to dance.
Actually, it's interesting that you bring up that analogy. In fact, thanks to the 2003 PROTECT Act, club/venue owners in the US can now be held not only financially, but criminally responsible for illegal activity that occurs in their venues, whether or not they are aware of it. The law is designed to be targetted against raves, and has come under fire from the ACLU for its abuse potential by law enforcement.
It's always a tough call, trying to decide how far one can expect the owner/maintainer of a resource to go in order to prevent abuse of the resource, and when it's effectively out of their hands, and therefore the responsibility of society/government.
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Shouldn't Ebay have to warn their customers when they have an indication that one of their merchants may be a higher risk than others? An email on the subject to Ebay Customer Support was returned with the standard canned, non-sequitar reply. A subsequent complaint elicited two paragraphs of disclaimers and disavowals of all responsibility.
They make it abundantly clear that Ebay's only real concern is their own bottom line. I won't deal with them again.
NR
I think eBay - just as several governments are now doing to banks - should be held liable anyway. WHY? Because they're responsible for the pathetically weak authentication system which allow for password theft and consumers are nearly powerless to do anything about it.
You can't "Phish" the password from someone who has to use 2-factor authentication systems to gain access to an account (e.g. smart card). Smart card readers are about $15 these days and the cards are pretty cheap. It would cost much to allow sellers and even buyers opt to get a more highly secured authentication scheme for their account making them virtually immune to phisphing and spyware attacks that lift passwords. eBay could give those sellers & buyers an icon so that parties could know who their dealing with and that's not a scam (at least if it is a scam they KNOW who's responsible for it.)
The idea behind pressuring the banks (and eBay) for this sort of thing is that they alone can make or break the fraud. They claim it isn't their fault and they should be liable, but unless THEY are willing to make stronger authentication an option, law enforcement and victims will never really be able to make a substantial dent in this sort of thing.
... I might be OK with a person who has 10 ratings with 95% positive.
How do you get 95% positive with 10 ratings?