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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.
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.
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.
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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