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eBay Describes the Scale of Its Counterfeit Goods Problem
Ian Lamont writes "As the Tiffany vs. eBay lawsuit winds its way through a federal appeals court, eBay has trotted out some numbers that show how many sellers attempt to sell fake goods on the auction site. Millions of auctions were delisted last year, and tens of thousands of accounts were suspended after reports were made to eBay's Verified Rights Owner program, which lets trademark owners notify eBay of fake goods being sold on the site. eBay says 100% of reported listings were removed from the site last year, most within 12 hours, and the company uses sellers' background information to make sure that they don't create new accounts to sell delisted items. Tiffany brought the suit against eBay in 2004, alleging that eBay was turning a blind eye to counterfeit luxury goods and demanding that eBay police its listings for bogus goods. Tiffany lost the case last July and will shortly present its arguments to the US Court of Appeals for the Second Circuit in New York. A similar case in France cost eBay $61 million."
...but how many of those items were NOT counterfeits, but merely real items that the trademark owner wants to illegitimately prevent from being legitimately resold? Like that GAP promotional CD a while back.
Search for gibson and PRS guitars... The amount of counterfeits is insane, and there is no way to know if its real or not.
I know this is a small example, but its a very real example.
If anything, Ebay is already too far on the side of "protecting" the various merchants who pretty much hate First Sale. The web abounds with tales of perfectly legitimate stuff being taken down, with approximately the same care shown in DMCA request cases.
Given that, I'd really hate to see what the situation would look like if Ebay's enemies win.
I used to work at an electronics retailer and we'd sell our returns on ebay(those that were functional, we had a lax return policy).
Despite being authorized distributers of the products we put on there, we had our accounts suspended several times by VeRO when one of the many third party watchdog services reported us erroneously. We usually had to track down somebody at the manufacturer and get them to fax "yes they can sell our stuff" to ebay.
And then a few weeks later, it'd happen again. Those watchdog services must get paid by # of items removed.
It's not just Tiffany or designer products. EBay is full of counterfeit stuff for everyday goods as well. 90% of the razor blades on EBay are fakes. If you buy Gillette Fusion refills there, you're likely to get something that looks nearly identical but will tear off half your face when you try to use them. I got ripped off for $70 -- and getting refunds through Paypal / EBay for counterfeit items is a joke when they want you to return the items with tracking to China where they'll just be used again to scam another consumer.
Too bad eBay doesn't put as much effort in to shutting down scammers of all kinds, not just those selling fake name brand goods.
Site policy has zero tolerance for sellers who list counterfeit items, and will also suspend any seller who lists a counterfeit item more than one time. Sharpe reports that...30,000 sellers [were] suspended.
One of the major reasons that eBay has so many fraudulent listings is that scam artists exploit a flaw in eBay's user database. And I'm not even talking about listening bootlegged or forged items. I'm talking about listing items that don't even exist.
The scam artists find eBay accounts and break into them, specifically accounts that have high feedback numbers (or transactions recorded) but have little activity in the last year. They basically dig through the user database for inactive accounts and then try to hijack them, taking over the account, and then changing the billing information before listing the fake items. Because the hijacked account already has positive feedback with it people are far more likely to trust the account and auction, not being critical enough to suspect they are being scammed for money or being sold knockoff items.
Another scam I've seen is where people purchase tons of electronics, like say they purchase dozens of video game consoles. They take pictures of the consoles to prove that they have them in hand. They then sell them to friends, family, or strangers for cash in person, while keeping the receipts for the original product. They then list the consoles on eBay and sell them to people taking the money from PayPal. But, because they've already sold the item off for cash, they tell the person who sent them money over PayPal that they will get a refund. They then call the cops, say that they have been robbed and someone stole several dozen expensive electronic components from them and then they recover whatever homeowners or rental insurance covers stolen property.
I purchase tons of expensive electronics on eBay. Multi-thousand dollar synthesizers, hardware video editing consoles, and vinyl record components. Some items seem to be half scams and half real and eBay doesn't do a damn thing to stop people from listing fake items. They rely on users to constantly scream at eBay to take the fake listings down. I have to persist often to get eBay to take down the endless fake auctions for Pioneer DJ components that are listed day after day and eBay still can't figure out a filter for this problem.
At the end of the day eBay is still great (minus the shipping charges).
I see hundreds of MMO (ok, WoW) gold listings every day, and if ebay claims 100% vero compliance that probably accounts for a lion's share of their statistics. Blizzard aggressively has these taken down, I know because when I auctioned my account they had that taken down even though I was including the game with it (first sale doctrine gives me the right to sell my cds, and I am equally free to expose my account information as I please).
I would have filed a counterclaim, except that by the time ebay removed my auction, it had already closed and the deal was done -- but to comply with vero, they deleted the auction anyway and *refunded my fees* accordingly. So, uh, thanks to Blizzard and ebay!
I'm possibly missing something blindingly obvious here, but what's the benefit of the eBay step in the insurance fraud scam? Just to make it look like they have a more legitimate reason for keeping 8 PS3s in their living room before they were 'robbed'?
Fake trading cards. I've got a relative that pointed this out to me maybe a year ago -- for example, people will take a legit football card, buy a jersey in the store, and make a fake "unique" patch card.
Here's one article on the problem.
Regardless of my opinion on the matter at hand, after 11 years of buying and selling on eBay, it is impossible not to feel satisfaction when they lose a lot of money.
And regardless of the outcome of this, they're losing money right now, or at least not making it hand over fist.
I'm very satisfied. F them!
I was selling some Monavie Active on ebay. Monavie Active is basically a health juice drink that is sold exclusively by Monavie Inc. so it is in Monavie's interest to stop people from selling Monaive active on ebay because they have a monopoly over the product. So they report every listing they find on ebay as Infringing on their copyright and ebay automatically takes it down. Now this wouldn't be so bad if ebay had good support but ebay in my opinion is lacking in that area. You can do the whole live chat thing but the reps on that have no influence over the VERO program. You have to reach them by a hidden form on their site and then you get an email address (rswebhelp@ebay.com) All you'll get from talking to them is that you have to contact the company that filed the infringement (Monavie) to resolve it. Now remember Monavie has a monopoly over their product and so their is no way they'll resolve this with me peacefully. Now I admit that ebay is just trying to play nice with everybody but they should really do more to support the little guy when he starts getting squished by the big Corps.
This is why I hardly ever buy on eBay any more (sell yes, buy no). I buy stuff on craigslist.org precisely because I can inspect stuff myself first hand before buying, and if I'm stupid enough (or want) to buy a fake, that's my problem. Not surprisingly, eBay owns 25 percent of craigslist now, but buying remotely, sight unseen, from "discount sellers" though eBay is, IMHO synonymous with asking to get ripped off. Its just too easy, as other posters have pointed out, to rip people off, and neither eBay nor Paypal do a damn thing about it.
Most buyers can't tell the difference. For the most part, they are getting a bargain because they think it is a Rolex or Louis Vutton, but it isn't really. They aren't paying for the real thing.
In a few cases, they buyer ends up feeling like a sucker because they try to sell their "bargain" to someone that knows the difference. So instead of making 10x their original investment, they learn their watch isn't "real". Well, it tells time, right?
Because of the price difference, the overpriced only-for-the-rich names are going to disappear. So in 10 years when you can't buy a new (real) Rolex anymore for $8,000 but you can buy all the fake ones you want for $80. Who is the loser here? Maybe the rich folks, but I can't see anyone on Slashdot giving a rat's ass about that.
With the Internet you make the distribution of these goods almost untracable, so there is no risk to the seller from the police. The police being used to enforce the only-for-the-rich prices for brand names. So you get a Rolex for $80 and it will last just as long as any other $80 watch - but it says Rolex on it. If your ego requires you to have brand names, this lets you do it without paying vastly inflated prices for useless names. The name doesn't make it any better, after all.
... for not preventing street side sellers.
If you mod me down, I will become more powerful than you can imagine....
whoops, posting to remove an accidental redundant mod.
A common scam that I've fallen victim to on at least one occasion when buying synthesizers on Ebay is the "It must have broken during transit" scam - the seller knows that an item is nonfunctional but sells it at full price, and before it ships puts a little exterior damage on it to make it look like it was damaged in shipping when really the thing was a basket-case to begin with. The seller and Paypal then instruct you to bug UPS for insurance money, which you will never get because the package itself generally has no signs of damage. I had one synthesizer that was in "fully functional condition" arrive with two broken keys - sure, that MIGHT have happened in transit, but what about the burned traces in the power supply? I always give preference to sellers now who have gone to the effort to make YouTube videos of their gear to show that it is in good operating condition.
It is very difficult for a purchaser to effectively file a counterfeit item report with Ebay. Realistically, they must get the assistance of the manufacturer to do so. I got stung when I purchased what was listed as an OEM part that had been out-of-production for a couple of years. The manufacturer was not interested in pursuing the matter. I would have had to pay for a qualified expert witness to examine the item and report on the item. The seller had admitted to me that they were having the items manufactured in China but labeled as being made by a reputable multinational firm in Japan. Even with my status of being a licensed PI and having some "Expertise" in the field of this part, Ebay refused to take substantive action. Paypal reversed the charges but that was it. Pursuing the matter with Customs and USPS is difficult without the assistance of the legitimate manufacturer. But they weren't interested in working a part that has been out-of-production for a couple of years. The Ebay power seller is still in operation. A close examination of his feedback shows that some others have been unhappy with the quality of his items, but "Happy" because he did refund the money when they complained and returned the item. I didn't want to ship contraband back to him as it is illegal to do so. I still hold the item and plan to sue him in civil court.
Let's say that the Nintendo Wii retails for $250. But you were going to sell them on eBay for $450 a piece and because of retail scarcity people bought them. Then you go through the scam I outlined above. When you make a claim with your insurance company, because people have used PayPal to transfer you $450, you can try to claim a loss of $450 instead of the loss of replacing a $250 machine.
Look at the rate at which they've been able to get Scientology stuff banned from eBay (such as 100% legit e-meters)... Because if there's a used market, the CoS doesn't make as much money.
My blog: http://www.seebs.net/log/ --- My iPhone/iPad app: http://www.seebs.net/seebsfrac/
They were able to validate these allegations every single time and be sure after proper audi alteram partem that the expulsion of the seller was warranted?
So eBay and rightholders are unfailing, Dave?
They then list the consoles on eBay and sell them to people taking the money from PayPal. But, because they've already sold the item off for cash, they tell the person who sent them money over PayPal that they will get a refund. They then call the cops, say that they have been robbed and someone stole several dozen expensive electronic components from them and then they recover whatever homeowners or rental insurance covers stolen property.
Lately, whenever I've sold something on PayPal that's been more than $50, PayPal has held the money in escrow until either the buyer gives me positive feedback, the shipping company confirms the package was delivered, or 30 days goes by. It's happened to me at least 6 times in the last couple of months. It's not annoying, but it does cause a small delay in getting my money.
As for telling the police about the stolen goods and getting an insurance claim, I'd have to imagine someone can only try that once in their life. I'd like to think that the second time, the police might suspect something and the insurance company would laugh at you.
-David
Of course the manufacturers would prefer the excess units be destroyed, than someone getting a fake North Face jacket for a 20th of the purchase price of the "real" item made in the same factory two days earlier.
My ism, it's full of beliefs.
....and Rolexes some moron will buy for a fiver, but what about all the stuff from Hong Kong that looks and sounds great one the page and then turns out to be utter crap when it arrives, and in some cases a fire risk - such as a power supply for a webcam I bought that was constantly painfully hot to the touch.
Plus then there's over-inflated postage costs that prevent you from sending the item back - if the vendor even offers that and doesn't just switch username in a week's time and gets all his Hong Kong buddies to give him feedback.
#include <sig.h>
And of course, let's not forget the classic "Raffle".
Regarding counterfeit fashion gear, the problem is more the fact no one cares. They know it's counterfeit and just care about what people see them wearing.
Like someone is actually going to believe that a person driving some old little hatchback car with a job at Tesco actually bought a real Fendi bag.
My complaint is how hard it is to buy real video games thanks to all the junk from Hong Kong.
Maybe it's improved but if ever I go back to buy a game from ebay I will flat out refuse to buy from anyone that looks like their image came from a google search.
E-bay always lists the item location.
>>>The seller and Paypal then instruct you to bug UPS for insurance money
Bzzzz. Wrong, wrong, wrong. The seller might tell you to get insurance, but Paypal always gives the exact-same answer: "Return to seller." You can then provide the delivery confirmation/tracking number to paypal and they will refund all your money. Or you can provide it to your credit card, and they will do the same.
Also, "it got damaged during shipping" is NOT an excuse for a seller. The seller is responsible for ALL damage, whether he did it himself or the mailman did it, therefore the seller must refund your money. And if he doesn't paypal or your credit card will do it.
I once received a cracked LCD screen, and the seller tried to pulled the "I'm not responsible" and "go claim insurance" scam. I said "WRONG" and immediately returned the screen. The seller ended-up losing the sale, having to pay additional postage for delivery (since I deliberately mailed without sufficient stamps), and got a nasty negative.
>>>I had one synthesizer that was in "fully functional condition" arrive with two broken keys - sure, that MIGHT have happened in transit
Too bad, so sad. It's still the seller's responsibility to deliver the item advertised.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
It would be good if they labelled the items as fake. If people know exactly what they're buying then there's no problem.
"Welcome to our world. We are the wasted youth. And we are the future too." Yes, I know these are stupid lyrics.
I for one don't mind buying counterfeit items, with counterfeit money of course :)
Some people are only alive because it's against the law for me to hunt them down and kill them.
Your advice comes down to:
1) Don't contact ebay
2) Hope the trademark owner lets you sell stuff that you own
3) If they don't, then sue them.
That's probably the dumbest advice on slashdot. And that's saying quite a lot. I mean, the mark was low, and you went lower.
someone mod parent funny!
oh, that will kill the joke?
dammit.
The insurance company will ask for a receipt to show how much you paid for the item. There is no way they will pay what you think it is worth or what you sold it for. And the chance of getting caught for insurance fraud makes this scam too risky.
It makes a little sense to stop secondhand resale of near luxury items for the original manufacturers. But only when the economy is growing and everyone has money to spend.
We are entering a new era. Most people are not going to have the money to spend on near-luxury goods at 20th century prices. But it will take a long time for the manufacturers to realize this.
If the manufacturers were smart they would get a list of all the people who attempted to buy and sell used their near-luxury goods from the watchdog groups that are forcing the sales off eBay. Then they would sell directly to these people themselves slightly flawed or returned goods. They would negotiate the price and terms themselves.
Sure it would take a lot of work. But there are a lot of people out of work. And they would control the market for their products.
But, again, it's going to take a long time before the manufacturers leave their 20th century mentality behind. Many manufacturers will never adapt to the new economic conditions and disappear. Whole industries like the recorded music industry are disappearing because as a group that is totally infected with lemming mentality, their executives can't adapt to the 21th century.
I don't think most people are that stupid. They know full they're not getting brand new fashion accessories at a 3rd of the cost or less and it's not a fake.
I've yet to meet someone who didn't think they were fakes. They're happy as long as they don't look like fakes.
There were some counterfeit fountain pens for sale on ebay a while back and I bought one, it worked great and at a reasonable price. Only downside to them was they had a weird misspelling of the brand they were trying to imitate; the original listing had no misspelling. The seller no longer exists, and I wish I could buy more pens! If only they had just sold these pens under their own brand, I didn't care about the brand name.
IANAL either, but you're mistaken.
The burden of proof in a libel case is on the plaintiff. Showing that the statement is true is sufficient to defend against a libel suit, but not necessary.
In general, to win a libel suit, you have to show that the statement was not true, that the other party should have known it wasn't true, and that the statement caused damage to the plaintiff's reputation.
Suing eBay because they told a bunch of people that you, where you is a account name on eBay, are a criminal, is not likely to survive summary judgment.
paintball
I can see two things playing into this: Brand names want to keep their image high, by keeping fake goods off the streets. Consumers want to know if they're getting legit goods. Are you willing to pay higher ebay user fees (to pay for lawsuit payment, systems for removing bunk goods) in exchange for knowing what you're getting is legit? I assume most people would rather leave the counterfeit standards at an acceptable minimum rather than have to pay for tougher checks. Some people probably would rather remove the counterfeit checks if it meant lowering the listing fees.