Criticism of E Bay - Fraud

Fraud

eBay Customer Support claims that its data show that fewer than .01% of all transactions result in a confirmed case of fraud. One mechanism eBay claims combats fraud is its feedback system. When a user feels that a seller or buyer has been dishonest, a dispute can be filed with eBay. An eBay user (whether seller or buyer) may be suspended if there are too many complaints made against them.

Until June, 2008, eBay allowed Mystery Box and Mystery Envelope auctions; however, these are almost all fraudulent auctions because the seller can manipulate the box contents to make sure it is never a good deal for the buyer. Mystery Envelope auctions offer cash prizes of an undisclosed amount to auction winners. The auction winner usually receives from 10% to 30% of the money he paid for the auction back in 'winnings'.

Scammers like to target new members to take advantage of their unfamiliarity with how eBay or PayPal works. New members can be easily tricked into thinking there is a special Web site they should make payments through (which is in fact a fake site setup by a scammer) or they may be tricked more easily into using a fake escrow company.

Many complaints have been made about eBay's system of dealing with fraud, leading to its being featured on the British consumer rights television program Watchdog. It is also regularly featured in The Daily Mirror's Consumer Awareness page. The complaints are generally that eBay fails to respond when a claim is made.

Frauds that can be committed by sellers include

• selling counterfeit merchandise - see section below for more details;
• shill bidding - see section below for more details;
• selling bootleg merchandise;
• receiving payment and not shipping merchandise;
• shipping items other than those described;
• giving a deliberately misleading description;
• knowingly and deliberately shipping faulty merchandise;
• denying warranty exchange after pre-agreeing to RMA of DOA merchandise;
• knowingly selling stolen goods;
• misrepresenting the cost of shipping;
• using bulk shipping prices to knowingly mask much higher costing, individual return shipping

Frauds committed by buyers include

• PayPal fraud, namely filing false shipping damage claim with the shipping company and with PayPal;
• Friendly fraud: receiving merchandise and claiming otherwise;
• returning items other than received; and
• the buyer sending a forged payment-service e-mail that states that he has made a payment to the seller's account (an unsuspecting seller may ship the item before realizing that the e-mail was forged).

Fraud is combated by

• third-party businesses, such as CheckMEND, compiling lists of stolen goods from local authorities and businesses so eBay consumers can check to see whether the goods they are buying are stolen; and
• third-party software that could potentially eliminate eBay account hijacking by alerting users if they are being tricked into going to a bogus, or "spoof", Web site (see anti-phishing).